Yes Bank Case Study.

1. Yes Bank Case Study

2. Introduction to Yes Bank
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Industry Banking and Financial Services
Founded in 2004, 17 years ago
Founders Rana Kapoor and Ashok Kapur
Headquarter Mumbai, India
CEO and MD Prashant Kumar
Products Credit cards, Investment and Consumer
banking, Insurance, Private and Corporate
banking, Wealth management, Loans
Website www.yesbank.in

3. Introduction to Yes Bank
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4. Building Momentum
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Source- Yahoo Finance

5. Yes Bank 2.0
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Introduction of Yes bank 2.0 for year 2011 to 2015
Aim -
 Balance sheet to be compounded at 33%
 Deposits compounded at 36%
 Loan compounded at 30%
 CASA: Current and Savings accounts base compounded at 30%
 It was termed as BHAG - Big Hairy Audacious Goal

6. Yes Bank 2.0
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Parameter Vision 2015 Result 2015
Branches 900 860
ATMs 2,000 1,600
Employees 12,750 15,000
Deposit base 125,000 cr 111,720 cr
Balance sheet 150,000 cr 100,000 cr

7. Kapoor vs Kapur
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 Ashok Kapur died in 2008.
 Promoter shareholding had been passed on to his family.
 Madhura, his wife proposed of appointing their daughter on the
Bank’s Board
 The decision was opposed by Rana as well as by the Yes
Bank’s Board, as a retaliatory measure.
 Shareholding to be moved to non-promoter status- Bank
 Ashok’s family raised an issue ,rights to be passed on to
them.(2013)
 The dispute went up to HC, decision in favor of Ashok’s family.

8. Allegations of whistleblower and RBI’s AQR
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 Whistleblower raised allegations- misclassification of bad
loans conflicts with respect to Rana Kapoor.
 JLN US & Co. independently examine the matter.
 JLN had access only to data provided by bank and was
unable to trace transaction done by Rana’s family office.
 2015- RBI conducted Asset Quality Review(AQR).
 Yes Bank non-performing loans were rs 4,930 crores- 7
times more than rs 750 crores that co. reported in audited
accounts in March 2016.

9. Appointment of new CEO
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 In 2019 citing severe corporate governance issues, RBI
appointed Ranveet Gill as Yes Bank’s CEO.
 Ranveet initiated an exercise called kitchen - sinking.
 Over 16% of the loans were linked to financial and real estate
firms, which included loans to Rcom and Zee Entertainment.
 Bank declared its exposure to troubled assets at Rs.17,000 cr.
 Share prices fell as low as 40% in a week and eroded
investors wealth due to window dressing of the bank’s
accounts and reports of Madhu Kapur selling her stake.

10. Selling of Shares by Madhu Kapur
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 The bank had declared that it had not indulged in any type of
window dressing of its corporate accounts.
 Madhu Kapur sold around 0.04% of her stake in the Bank.
 ThSelling of Shares (Aquila)e bank share ended at Rs.203 a piece
down 9.14% on Thursday.
 A year later, the 2019 ‘kitchen sinking’ process also made YES
Bank shares to drop 30 percent.
 Investors of the bank lost another estimated Rs.16,500 cr.

11. Action by RBI
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 Appointment of R. Gandhi as additional director on yes bank
board.(former central bank deputy governor)
 In 2019, Rana sold 2.3% stake of Morgan Credits Pvt. Ltd in bank
worth 377 cr.
 Yes Capital (India) Pvt Ltd’s stake of around 2.17% were forced to
sell to the bank at very discount rate.
 One by one all the shareholding of rana family were sold at dismal
price in spite of his and his employees 15 years of to build a bank
and create long-term shareholder value.

12. Conclusion
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 Yes bank Reported stressed asset worth 10,000 cr.
 Titled as world's worst-performing lender in 2019.
 There was no balance between the loan sheet and the depositors’
sheet.
 RBI put a 30 days moratorium on Yes Bank to save it.
 Reserve Bank of India took initiative and saved Yes Bank from
major collapse.
 ED arrests Yes Bank co-founder Rana Kapoor in fresh money
laundering case in 2020
 SBI plays godfather to Yes Bank, ready to maintain its 49% stake.

13. Thank You