Yes Bank shareholders have approved the re-appointment of Rana Kapoor as the bank’s CEO and Managing Director for a period of three years.
“The shareholders supported the resolutions for re-appointment of Mr. Rana Kapoor as MD & CEO of the Bank for a further period of 3 years, effective September 1, 2018, with an overwhelming majority. The re-appointment is subject to final approval by the Reserve Bank of India (RBI),” the bank said on June 12.
Post its annual financial results in April, Yes Bank’s board had cleared Kapoor’s term for reappointment at the helm until August end 2021.
The approval comes after Yes Bank was hauled by Reserve Bank of India (RBI) for reporting one of the highest proportion of differences in bad loan classification for two consecutive years.
In FY17, RBI found divergence of Rs 6,355 crore and in FY16 at Rs 4,177 crore in classification of gross non-performing assets (NPAs) by Yes Bank as compared to the central bank’s classification. The banking regulator imposed a monetary penalty of Rs 6 crore on the bank for the same.
Meanwhile, Yes Bank’s loans to a naval engineering company and a chemical firm have been flagged with risks by some analysts.
However, the bank continues to be among highly rated stocks, trading at a premium on the back of its strong profitability and healthy loan and deposit growth.
Yes Bank's stock price jumped over 12 percent in the last one year rising as much as 33 percent during the period.
For the fiscal ending March 2018, Yes Bank’s annual loan growth was at 54 percent, the fastest across banks in India. It is also the third-most profitable by return on assets among its private sector peers.
Post results, a Motilal Oswal report said, "We believe that while Yes Bank is likely to maintain industry-leading growth, sustained strength in asset quality and consistency in operating metrics are critical for sustained re-rating of the stock. Driven by strong balance sheet growth, CET-1 ratio declined to 9.7 percent, and the bank will raise equity capital in the near term. Net stressed assets have declined to ~1.7 percent of advances. We estimate earnings CAGR of 32 percent over FY18-20E..."
Other approvals at AGM
Shareholders also gave their nod to issuing dividend of Rs 2.7 per equity share of Rs 2 each (i.e. 135 percent) as recommended by the bank's board.
At its 14th AGM, the shareholders approved, through a special resolution, to raise capital aggregating up to $1 billion (approximately Rs 6,700 crore) by way of issue of shares (QIP/ADR/GDR/FCCB).
Similarly, the proposal to borrow/raise funds in Indian/foreign currency by issue of debt securities including, but not limited to non-convertible debentures, medium term notes (MTN) and bonds up to a total of Rs 30,000 crore. The shareholders approved to raise the total borrowing limit of the Bank to Rs 1.10 lakh crore from Rs 70,000 crore.
Among appointments of other board members, the shareholders passed resolutions for the appointment of Subhash Chander Kalia as Non-Executive Non-Independent Director, Rentala Chandrashekhar and Pratima Sheorey as Independent Director for five years and reappointment of Ajai Kumar as Non-Executive Non-Independent Director.
Other approvals by shareholders include re-appointment of M/S BSR & Co LLP, Chartered Accountants, as statutory auditors of the bank.
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