Yes Bank brass lists 6 reasons for Rs 15,000 crore fresh capital
The bank has to prepare for new set of NPAs post August when the six-month moratorium period ends
- May 27, 2020,
- Updated May 27, 2020 4:57 PM IST
Yes Bank's new board has listed out six reasons for additional capital infusion of Rs 15,000 crore. The bank's top brass include ex-PNB chairman Sunil Mehta as non executive chairman and former SBI MD Prashant Kumar as CEO & Managing Director. Yes Bank appointed new board and CEO after Rs 10,000 crore capital infusion by the State Bank of India (SBI) and half a dozen other banks earlier this year. The bank will need around Rs 5,000 crore immediately. Here is why the money is needed:
As they say, nothing comes for free, investors of the additional capital expect returns by way of dividends and appreciationof their capital. Currently, since the bank is incurring losses its return on equity (RoE) as well as return on assets (RoA)are negative. The bank has to get back to generating returns or at least the investors want to see a credible road map of a targeted RoE or RoA in the next 3-5 years.
Also read: Coronavirus crisis: All that's bad about a 'Bad Bank'
Also read: Too much money, very few takers; liquidity no issue in economy
Yes Bank's new board has listed out six reasons for additional capital infusion of Rs 15,000 crore. The bank's top brass include ex-PNB chairman Sunil Mehta as non executive chairman and former SBI MD Prashant Kumar as CEO & Managing Director. Yes Bank appointed new board and CEO after Rs 10,000 crore capital infusion by the State Bank of India (SBI) and half a dozen other banks earlier this year. The bank will need around Rs 5,000 crore immediately. Here is why the money is needed:
As they say, nothing comes for free, investors of the additional capital expect returns by way of dividends and appreciationof their capital. Currently, since the bank is incurring losses its return on equity (RoE) as well as return on assets (RoA)are negative. The bank has to get back to generating returns or at least the investors want to see a credible road map of a targeted RoE or RoA in the next 3-5 years.
Also read: Coronavirus crisis: All that's bad about a 'Bad Bank'
Also read: Too much money, very few takers; liquidity no issue in economy