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Yes Bank Names Deutsche Bank's Ravneet Singh Gill As CEO To Replace Rana Kapoor
Shares of Yes Bank surged as much as 19.1 per cent after the announcement in their sharpest intra-day jump since September 2013.
Yes Bank has hired the head of Deutsche Bank IndiaRavneet Singh Gill as its new chief executive after the Reserve Bank of India demanded Rana Kapoor was replaced, lifting its shares.
Yes Bank's stock had been dragged down by a long tussle with the central bank over Mr Kapoor's future, which had also led to several board departures.
Mr Gill would join by March 1, Yes Bank said in a statement, adding that its board will meet on January 29 to finalise who would lead the bank in the transition period.
The RBI had denied Mr Kapoor an extension to his term twice last year without giving a reason and asked Yes Bank to find a new CEO by February 1.
"It is a positive for Yes Bank as the board has brought in a professional and an outsider CEO, who isn't likely to be operating in the shadows of Rana Kapoor," said Shriram Subramanian, founder of proxy advisory firm InGovern.
"If Ravneet Gill gets a free hand to run the bank, it would be a positive for investors as far as corporate governance is concerned," he added.
The announcement briefly drew investor attention away from a 7 per cent fall in Yes Bank's third-quarter net profit as it set aside provisions for its loan exposure to a struggling infrastructure conglomerate.
Yes Bank shares surged as much as 19.1 per cent in their sharpest intraday jump since September 2013, before settling 9.2 per cent higher.
Its net profit fell to Rs. 1,002 crore ($141 million) in the three months to December 31, missing analysts' average estimate of Rs. 1,060 crore, according to Refinitiv data.
Gross bad loans as a percentage of total loans, a measure of asset quality, rose to 2.1 per cent by the end of December from 1.60 per cent a quarter ago and 1.72 per cent last year.
The lender has a funded exposure of Rs. 2,530 crore to companies and special purpose vehicles of debt-laden Infrastructure Leasing and Financial Services (IL&FS) as on December 31, of which it has classified Rs. 1,913 crore as non-performing.
Yes Bank senior group president Rajat Monga, who was also mentioned as a candidate for the top job, said IL&FS' debt resolution should start seeing results in 3-6 months.
Source: NDTV Profit
