INSUBCONTINENT EXCLUSIVE:
Global brokerages, including Macquarie and JPMorgan, stuck to their bullish stance on YES Bank with an upside of more than 80 per cent
The YES Bank board on Tuesday decided to seek at least a 3-month extension for MD and CEO Rana Kapoor from RBI beyond January 31, 2019
Macquarie said the extension request may not be entertained, given the nature of allegations, and the RBI may not approve internal
candidates as they may be construed equally responsible for bank operations
"The stock re-rating now hinges on outcomes of stated action plans as well as FY18 divergences
Macquarie is positive on YES Bank with a target price of Rs 425," it said.
The RBI had last week curtailed the three-year term that the
board had sought for Kapoor, also one of the promoters, to January-end next year and asked the bank to find a replacement.
JPMorgan also
closing price of Rs 219.85.
According to the brokerage, lack of visibility on a succession plan prevails
while the BSE Sensex rose 64 points, or 0.22 per cent, to 36,734.49
In a BSE filing, YES Bank said Kapoor has been in his position since the inception in 2004 and finding a suitable successor is a "time
consuming challenge".
To ensure a long-term succession plan, the board also decided to elevate senior group presidents Rajat Monga, who
handles financial management, and Pralay Mondal, who heads the focus area of retail, as executive directors.
The board also established a
search and selection committee comprising three members from the existing nomination and remuneration committee, along with two external
experts to identify Kapoor's successor.
On the other hand, Deutsche Bank says given the uncertainties around YES Bank and its strategies,
medium-term growth or fees may be challenging
It cuts price target to Rs 310 from Rs 350 earlier while retaining "Buy" rating on the stock.
A total of 31 out of 46 brokerages covering
the stock have Buy or an equivalent rating, 10 have Hold while five have Sell rating, with median price target of Rs 411.50, according to
Reuters.
The private lender has lost 30.3 per cent this year, compared with rival ICICI Bank's 0.92 per cent decline and Axis Bank's 8.9
