Private sector lender Yes Bank on Thursday names Ravneet Gill its new chief executive officer and managing director, ending months of succession uncertainty.
Gill, who will be taking the reins from the lender’s founder MD and CEO Rana Kapoor on March 1, is the CEO of Deutsche Bank’s India operations.
Yes Bank shares rose as much as 13.74 percent Rs 245, highest since October 17. The stock has seen a rough wave over the last few months due to a squabble with the Reserve Bank of India over current CEO Rana Kapoor’s tenure, which had also led to several board departures.
Most brokerages are neutral on the stock after the appointment of Gill and other developments the bank announced in its Q3 review on Thursday. Here's what they have to say on Gill's appointment:
Credit Suisse - Neutral on the stock; target price at Rs 205 per share.
The Swiss brokerage said the new CEO will drive the consolidation in the balance sheet. In a report, the brokerage said it believes the bank needs at least $40 billion and a dividend cut for its 25 percent loan growth.
Deutsche Bank - 'Buy Call' on the stock; raised target by 4 percent to Rs 280 per share.
The financial house said the new managing director appointment is a 'key positive' for the bank but said that some transition pangs are likely to linger in the near term. The overall valuation, as per Deutsche Bank, 'looks attractive' and the risk-reward seems to be favourable.
Citi - Neutral on the stock; target price at Rs 240 per share.
The brokerage house said that the appointment of Gill is positive keeping in mind the slowdown in the business growth of the private sector bank.
The bank said the growth is likely to be constrained for the next few quarters until the new chief executive officer takes charge.
Nomura - Neutral on the stock; target price at Rs 245 per share.
The financial house said the uncertainty around the asset quality of the bank still remains a concern. One of the uncertainties to watch out for is, the report said, is the central bank's divergence report.
First Published: Jan 25, 2019 10:46 AM IST
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