Yes Bank share price up on SBI chief’s remark

HYDERABAD: Shares of Yes Bank jumped over 10 per cent to Rs 45 on BSE on Friday, recording its sharpest intra-day gains in the past one month. The last time they surged in double-digits was on December 12 when the scrip rose over 12.5 per cent in a single session.

The bank’s shares have seen a bloodbath having crashed over 83 per cent in the past one year. However, in some respite, the scrip rose about 12 per cent in the last seven trading sessions.

The reason for Friday’s stock rally has much to do with the remarks from Rajnish Kumar, chairman, State Bank of India (SBI). In a television interview at Davos, Kumar said he was certain that ‘some solutions will emerge’ to steady the bank, which has been on trying to shore up capital, though most of its efforts proved futile so far.

“Yes Bank is a significant player in the market with an almost $40 billion balance sheet,” he said adding, “I have a feeling that it will not be allowed to fail.”

Earlier this month, the bank’s board had approved fundraising plan of up to Rs 10,000 crore in one or more tranches on such terms and conditions as it may deem fit, by way of issuance of securities including but not limited through QIP, American Depository Receipts, Foreign Currency Convertible Bonds or others like private placement of shares.

Yes bank has been under the radar following the exit of one of its promoters Rana Kapoor last year.
The private lender’s asset quality has been falling, even as divergences in gross bad loans is steadily rising.

Given the rise in non-performing asset (NPAs), its provisioning needs too are mounting, which in turn is depleting its capital.