Mr Gill is currently the chief of Deutsche Bank’s India operations
Yes Bank today also announced its quarterly results
Yes Bank Ltd on Thursday named Deutsche Bank India chief Ravneet Singh Gill as the new managing director and chief executive officer (CEO), succeeding Rana Kapoor at the private sector lender.
The announcement of the new CEO came on a day when the bank reported a 7% drop in net profit in the December quarter. Both announcements followed a board meeting on Thursday.
Clarity is yet to emerge on the future of Yes Bank president Rajat Monga, who was also in the race to succeed Kapoor. The board had recommended his elevation to the executive director’s post, which is awaiting approval from RBI.
Monga, who currently oversees the bank’s finance function, is expected to handle additional responsibilities once the RBI approval comes through.
The bank’s board also announced the appointment of Maheshwar Sahu, a former civil servant, and Anil Jaggia, a former chief information officer of HDFC Bank Ltd, as independent directors for a period of five years.
The board also recommended the elevation of chief risk officer Ashish Aggarwal to the post of executive director, subject to RBI’s approval.
The board’s appointment of a new Yes Bank CEO followed an extensive search process. Gill, 55, was appointed Deutsche Bank’s India CEO and a member of its Asia-Pacific executive committee in 2013. Earlier, Gill was heading Deutsche Bank’s capital markets and treasury solutions for India after having run the bank’s private wealth management and corporate banking operations. Gill joined Deutsche Bank in 1991.
Meanwhile, Yes Bank’s profit fell to ₹1,001.8 crore in the quarter ended December from ₹1076.87 crore in the year earlier because of higher provisions on account of its exposure to Infrastructure Leasing and Financial Services Ltd (IL&FS) and fall in non-interest income.
The bank has set aside funds worth ₹507.5 crore, including ₹478.3 crore towards IL&FS accounts, to cover losses because of potential defaults. This is after the bank classified ₹1,913 crore of its exposure to the stressed infrastructure conglomerate as non-performing asset (NPA) in the December quarter.
Gross NPA rose to 2.1% at the end of December, compared with 1.6% at the end of the preceding quarter. The bank’s loan book, however, grew 42% from a year ago, helping it report a strong increase in net interest income at ₹26,664 crore in the December quarter from ₹18,888 crore in the year earlier.
“The biggest positive, apart from CEO appointment, is that Yes Bank has classified a major part of their IL&FS exposure as NPA in this quarter. This clearly suggests that one of the major negatives is behind the bank and there will be relatively lower impact of same on profitability in the coming quarter," said Ashutosh Mishra, head of research at Ashika Stock Broking.
Yes Bank has seen its shares decline against the backdrop of uncertainties over the CEO succession plan after RBI, in September, refused to allow co-founder Kapoor to continue as the bank’s CEO beyond 31 January 2019.
RBI’s diktat, on one hand, forced the bank to expedite the CEO search process and on the other hand, compelled the two estranged promoters—Rana Kapoor and Madhu Kapur—of the bank to end their decade-old feud to allay investor concerns.
But a series of board-level resignations in quick succession and a delay in the promoters’ settlement process kept the bank’s stock under pressure.
Yes Bank’s announcement of a new CEO, which came a few minutes before market closing, propelled its stock higher by 15% to ₹226 on BSE.
The shares of Yes Bank finally closed at ₹213.85 on Thursday, while the benchmark Sensex gained 0.24% to close at 36,195.10 points.
The banking index, Bankex, gained 0.1% to close at 30,570.52.