When asked why the bank hired a new CFO, he said, “In some ways. directionally, we are changing the banks in terms of mix revenues, costs structures and future strategy and we needed somebody to come in and execute that strategy."
YES Bank has raised Rs 1,930.46 crore through qualified institutional placement (QIP) to fund its business expansion. The QIP opened on August 9 and closed on Wednesday.
Ravneet Gill, MD & CEO of YES Bank, spoke to CNBC-TV18 about the QIP and what the lender plans to do with the raised capital.
"The capital raised is effectively growth capital. The pre-provisioning operating profit is sufficient for the provision that the bank needs to take and do not need any incremental buffer, so all capital raised will be used for growth," Gill said on August 16.
"We were able to raise the amount because we had shareholders’ approval to raise 10 percent otherwise the issue was oversubscribed many times over with some high-quality investor interest, said Gill adding that, “This shows that people fundamentally believe in the Yes Bank story and future of the bank.”
"A major part of the QIP allocation was to long-only investors and very little of it was to momentum players or hedge funds...There is a general belief that there are a lot of fundamental inherent strengths of the banks, which could hold investors in very good stead going forward,” he added.
"The capital raised takes the CET capital up to 8.6 percent from 8 percent," said Gill.
Gill confirmed that the money raised going forward would also be used for the growth. “To my mind, how much more capital we need is a function of at what rate we aspire to grow,” he said.
When asked why the bank hired a new CFO, he said, “In some ways, directionally, we are changing the banks in terms of mix revenues, costs structures and future strategy and we needed somebody to come in and execute that strategy. We brought in a CFO who we could do the job of driving the business, allocate resources, and engage with investors effectively,” he said.
Talking about the average slippage ratio, he said, “At the end of quarter four we had said that our total credit cost for the year was going to be 125 basis point. The credit cost for first quarter was 32 basis points. So we would still to the guidance that we provided. Our overall credit cost guidance for the year is about 125 basis points.”Source: CNBC-TV 18Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.