Shares of India’s major private sector lender Yes Bank snapped a 5-day losing streak, and rallied as much as 7% after the firm clarified that reports about Rana Kapoor eyeing Chairman seat has been taken out of context. Yes Bank share price rallied more than 6.7% to intra-day high of Rs 171.35.
Yesterday, a LiveMint report had said that Yes Bank’s outgoing CEO Rana Kapoor is eyeing the post of non-executive chairman once his term ends on 31 January, citing a document reviewed by them. Yes Bank shares had also been under extreme pressure after global rating agency Moody’s downgraded the lender’s ratings to non-investment grade and changed outlook to negative from stable on the back of various resignations from the Board.
“Although the bank’s reported credit fundamentals remain stable, the developments surrounding the transition in leadership as well as the governance issues are credit negative because they complicate management’s effective implementation of the bank’s long-term strategy,” Moody’s noted. However, in an interview to CNBC TV18 this morning, Rajat Monga, Senior Group President, Yes Bank said that chairman post at all private banks is held by ‘independent’ individuals. Business fundamentals are strong and steady, with overall exposure to HFCs being 3.2%. 90% of this is rated ‘AA’ or better, he added.
While speculation is still on, Yes Bank Managing Director and CEO Rana Kapoor is unlikely to be in the fray for the post of chairman which fell vacant following the resignation of Ashok Chawla earlier this month, PTI reported citing sources yesterday. As Rana Kapoor still remains the head of the bank until January next year, the possibility of him proposing for the chairman post looks bleak, the news agency reported sources as saying. The private sector lender will recommend the name of new chairman for approval by the RBI after the meetings of the Nomination and Remuneration Committee (N&RC) and the board of directors scheduled for December 13.