Yes bank

Hi guys,
After banging my head for the last 2 days I now understand each and every number of yesbank.

Everything about the asset transfer.

1. They have transferred 43715cr of assets to ARC out of this 15198 is from write off account which means 28517cr of gross asset transferred from books.

2. This 28517cr of gross asset has a net book value of 4982cr(NBV means gross advances minus provision) against this NBV they got a valuation of 8046cr. This means a premium of 61.5%

3. As per RBI each asset transferred(account) is treated individually. So for an account whose consideration is lower than NBV bank has to report loss(can be spread over 2 quarters) but for accounts where consideration is higher
   Eg if X account has a NBV of 500cr but got a valuation of 400cr then 100cr loss needs to be recorded but for Y account where NBV is 500cr but valuation is 600cr unless 500cr is recovered 100cr cannot be realized.

4. Bank has realized 609cr of loss in equity and 300cr in P&L and rest will be recognized in Q4 through P&L this was for accounts whose valuation was less than NBV.

5. Since bank received 1207cr of cash they realized 512cr. Accounts whose valuation is grater than NBV and since cash received they can root through P&L.

6. The excess valuation (8046cr-4982cr) + (609cr-512cr)= 3161cr will be recorded as provision against SR and will only be realized as and when cash recovery happens.

7. Bank has total security receipt of 8853cr this includes 2013cr of previous SR and 6839(85% of 8046) as new one. The provision against this is 5080cr includes 1808cr of previous and 3161cr(premium valuation) and balance as new provision.

8. That means 3773cr of NET SR which needs to be provisioned as and when required. Now management has a view that the recover will offset this aging requirement going forward but due to unexpected delay in recovery there can be higher provisioning in some quarters.
   That means if this quarter management was expecting the 850cr of provisioning to be offset by recover which got delayed we can conclude that in future recovery can be higher and provision lower.

   In short we can say provision needs to be accounted now but recover can have timing lag.

9. Provisioning for fresh slippage this quarter was only 250cr rest was aging and the are very confident that next quarter provision for fresh slippage will be less than 200cr but aging provision uncertain.

10. Book value is at 14 and equity is 40154. This means below 14 it goes less than 1 PB(even PSU not getting this valuation)

11. This quarter was inflated in terms of operational numbers as 137cr of unrealized gain was booked via bonds and 200 cr of benefit from ARC(512cr profit realized but only 300cr loss recognized refer point 4 and 5)

NEGATIVES AROUND YESBANK NOW

1. AT1 bond(will go through judgment and articles to further increase understanding)
2. 50cr NET profit
3. Locking being released

Expecting next 3months to be bad and high volatility in this counter. I don’t expect closing below 17.5 as at this price PB is 1.25(very low).
Next quarter has the ability to be some what like this but FY24 is bright. Their TTM PPOP is 3000cr so we can see at what run rate they are.

Will try to sell and buy at lower levels from tomorrow onwards.

Just to add. They realize that 3161 premium valuation from P&L as and when recovery happens and 9000cr of TAX asset so profit might grow slow but book value has a big chance of improvement in future

EDIT TECHINICAL

17.5 should act as support but worst case 15.87 200SMA will hold in my view at 15.87 PB is 1.13

Thankyou