Yes Bank: Highlights from Annual Report 2019
- Shruti Sundar Ray
- Nov 30, 2019
- 4 min read
Updated: Apr 19, 2020
Mandatory disclosures by the Bank indicate a mounting cost of funds and a lower-than-industry-average provision coverage
The provision coverage ratio of Yes Bank for 2018–19 was 43.10%, which is lower than the 50.02% ratio for 2017–18. Competitors like Kotak Mahindra Bank and HDFC Bank had provision coverage ratios of 71.9% and 71.3% respectively in 2018–19.
The Bank’s CASA ratio to % of total deposits shrunk from 36.5% in 2017–18 to 33.1% in 2018–19. The cost of fund increased from 6.0% in 2017–18 to 6.5% in 2018–19. Competitors like Kotak Mahindra Bank and HDFC Bank had CASA ratios of 52.5% and 42.4% respectively in 2018–19.
Although well above the Basel III stipulation, the Bank’s Capital Adequacy Ratio reduced from 18.4% in 2017–18 to 16.5% in 2018–19. Despite increase in Tier I and Tier II capital, the total Capital Adequacy ratio reduced from 2017–18 to 2018–19 due to an increase in total risk weighted assets.
The Bank’s Net Profit in 2018–19 was Rs. 17,202 million, down by 59.3% from 2017–18. The Board of Directors of the Bank recommended a dividend of Rs. 2 per equity share.
The Bank had a net loss on non-interest income, which increased by 12.1% from 2017–18 to 2018–19.
Gross NPA % to Total Advances of the Bank has increased from 1.28% in 2017–18 to 3.22% in 2018–19 while the net NPA % to Total Advances has increased from 0.64% to 1.86% over the same period.
The sector-wise % of Gross NPAs to Gross Advances was the highest for the Personal Loans sector at 6.46%.
Two of Yes Bank’s three subsidiaries Yes Asset Management (India) Limited (YAMIL) and Yes Trustee Limited (YTL) made losses of Rs. 38.6 million and Rs. 1.11 million respectively in 2018–19. During the year, Yes Bank has infused capital of Rs. 195 million in YAMIL.
Yes Bank’s return on average equity reduced significantly from 17.7% in 2017–18 to 6.5% in 2018–19. The Bank’s return on average assets reduced from 1.6% in 2017–18 to 0.5% in 2018–19.
Ravneet Singh Gill, MD & CEO, was granted 5,000,000 stock options at a grant price of Rs. 231.15. Senior Group President Raj Ahuja and Group President Rajiv Anand were also granted 400,000 and 15,000 stock options respectively.
Shagun Kapur Gogia, who held 7,91,25,000 equity shares in the Bank as a joint holder with Madhu Kapur, was appointed as an additional director (non-executive non-independent) in April 2019. She does not hold positions on any of the Director Committees. Her appointment, she being the daughter of co-founder Ashok Kapur, assumes significance since it comes after the departure of co-founder Rana Kapoor as MD & CEO of the Bank.
Rentala Chandrashekhar, Independent Director of the Bank, resigned from directorship of the Bank in November 2018 citing that he was deeply concerned about the recent developments at the Bank and dismayed at the manner in which they have been dealt with.
The CSR amount unspent by the Bank was Rs. 41.8 crore in 2018–19 while the prescribed CSR expenditure for the same period was Rs. 95.58 crore.
Yes Bank has not disclosed contingent liability for past liability that may arise from a retrospective application of the February 2019 Supreme Court judgment, which clarified that certain special allowances should be considered to measure obligations under Employees’ Provident Funds Act, 1952.
In June 2018, SEBI disposed of the adjudication proceedings initiated against the Bank in 2017 for alleged violation of SEBI (LODR) Regulations, 2015 and the Bank paid Rs. 40,80,000 without admitting or denying the violation.
According to the Director’s Report, there were no materially significant transactions with related parties, which could lead to a potential conflict of interest.
No awards were passed by the Banking Ombudsman on customer complaints against Yes Bank in the years 2017–18 and 2018–19.
The employee strength of the Bank in 2018–19 shows that the top management had 3 female employees and 67 male employees. In 2017–18, the top management had 12 female employees and 94 male employees. The percentage of female employees in the top management has reduced from 11.32% in 2017–18 to 4.28% in 2018–19.
Yes Bank does not have an employee association.
The number of permanent employees with disabilities in Yes Bank is not indicated separately in the Business Responsibility Report. Instead the Bank reports that it, being an Equal Opportunity Employer, makes no distinction between employees on the basis of disabilities.
Number of employees trained in a classroom under Yes Bank’s Induction Program in 2018–19 was 13,117 male employees and 3,015 female employees. The percentage of female employees trained can be calculated as 18.69%.
Yes Bank in November 2018 acquired equity shares constituting 30.00% of the paid up share capital of Valecha Engineering Ltd. In January 2019, the Bank sold the equity shares constituting 30.00% of VEL’s paid-up share capital.
The environmental risk preparedness of the Bank is overseen by its Reputational Risk Management Committee.
Amount received as donations from the employees in 2018–19 under Yes Bank Employee Payroll Giving Initiative is Rs. 33,93,767. Under the Initiative, registered employees contribute a stipulated amount from their salary every month toward a cause of their choice from options shared by the partner.
The shareholding pattern of Yes Bank reveals that 40.33% of its shares is held by Foreign Institutional Investors while 19.80% is held by the Promoter & Promoter Group.
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