Yes Bank fell up to 30 per cent on the NSE on Tuesday after the private lender reported a weak earning results for the fourth quarter and multiple rating agencies downgraded its stock.
Yes Bank reported Rs 1,506 crore net loss, its first ever loss, on account of a spike in bad loans. This was followed by downgrades from agencies like Macquarie, Edelweiss, HSBC and Citi.
At 10.45 a.m., Yes Bank was trading at Rs 177.90 apiece down 25 per cent or Rs 59.30 on the NSE.
Macquarie Capital Securities double-downgraded Yes Bank stock to under-perform saying, “We must eat humble pie today and admit we underestimated risks in structured finance. We got the call wrong.”
“Over the past eight years we have been constructive on YES Bank’s ability to not just survive, but to thrive in a risky business segment like structured finance,” the global investment bank said.
“Yes Bank’s YQ4 performance, under the new leadership, was a reflection of management’s shift to a conservative and prudent approach, calibrated growth strategy and re-building credibility and confidence,” Edelweiss said in its report.
Adding that the bank, proactively, created higher contingent provisions and “pruned corporate exposure which led to PAT loss of Rs 15 billion”. Edelwiss downgraded Yes Bank stock to ‘Hold’.
Yes Bank reported its worst quarterly results after top management rejig, said Emkay Global Financial Service, downgrading it to ‘sell’.
“It posted PBT loss of Rs 24 billion and a net loss of Rs15 billion in Q4FY19, mainly due to reversal of fees and contingent provisions (Rs 21 billion). For FY19, PAT stood at Rs17.2 billion and RoA at 0.5 per cent,” it added.