In chat with Anil Singhvi, Yes Bank MD Prashant Kumar says capital ratio at 20 pct after FPO is unprecedented

Yes Bank, which has raised Rs 15,000 crore through its recently concluded Follow-on Public Offer (FPO) has taken its CET ratio to 13.3 ensuring a 5.5 per cent buffer, bank’s Managing Director (MD) and Chief Executive Officer (CEO) Prashant Kumar told Zee Business Managing Editor Anil Singhvi in an exclusive interview. The overall capital ratio has now become 20 per cent, he added. It is unprecedented for the bank to have its capital ratio at this mark, he further said. 

This has also enhanced the liquidity situation for Yes Bank, even though the deposits growth has been good, the MD said. 

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 This money will largely be used for growth purposes and the bank’s strategy is to focus on the retail and MSME segment.

The bank’s provisioning has also come down quarter-on-quarter and year-on-year.  

The bank has already done a provision of up to 75 per cent on its old loan book and there is no further requirement on this, Kumar said. Any further provisioning will be on new slippages, he further said. 

Around 20-25 per cent of the retail customers opted for the loan moratorium because of the coronavirus pandemic. In the MSME and corporate segment it was 15-20 per cent. Since the economic activity is still not into its full swing, it will be incorrect to assume that the people will be able to pay all their instalments. 

The collections have however reached 70 per cent of the pre-Covid period, Kumar said. In the credit card segment, the collections have reached up to 90 per cent. This indicates that the economic situation has improved considerably and people have started routing money in their accounts. 

The MD has also assured the depositors in the bank and its investors that the bank is not the same as it used to be and the new management is running it professionally. The new leadership will ensure that the bank continues performing better.

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The book value of Yes Bank shares was Rs 17 before the FPO and now it is Rs 15.