UBS spooks Yes Bank counter, shares tank 7.46%

Yes Bank scrips tanked by almost 7.50 per cent today following concerns over asset quality raised by foreign brokerage UBS, which the bank dismissed as a "distorted picture".
The bank counter closed at Rs 797.35 on the BSE, making it the worst performer amongst banking stocks, as against 1.72 per cent correction in the benchmark Sensex and 1.69 per cent fall in the Bankex, following the report.
The market rout was driven by the bloodbath in Asian markets, triggered by the massive sell-off in Chinese markets.
However, the Rana Kapoor-led lender dismissed the asset quality concerns, saying the report presents a "distorted picture".

UBS' sectoral report on stressed exposures identified Yes Bank as the most vulnerable among lenders to a prolonged weak credit cycle and added that consensus may not be ready for a sharp increase in the bank's credit costs.
In the wake of continued economic sluggishness, the brokerage analysed documents submitted to the Registrar of Companies, which are used by companies to secure loans, and the overall exposure of the banking system analysed stood at USD 100 billion.

Meanwhile, the bank today issued a statement that it has raised Rs 554 crore through a tier-II bond issue. The issue was closed on June 29.

The 10-year bonds were raised at a coupon of 9.15 per cent and saw subscription from investors, including insurance companies and pension and provident funds, the bank said in a statement.
After the market hours, the bank released a report by UBS' Australian rival brokerage Macquarie which said the asset quality worries are exaggerated.
"This report (UBS) has exaggerated the exposures attributed to Yes Bank given that the RoC filings reflect historically sanctioned amounts, which are dated and therefore do not reflect the actual outstanding exposures.
"The report compares sanction amounts to total loans outstanding as on March 31, 2015 thus presenting a distorted picture," the bank said in a statement.

It added that even as the economy has been continuously facing challenges for the last five years, "the bank has demonstrated exceptional credit quality outcomes" which is reflected in its net NPA, restructured loans and credit costs.
The bank also exuded confidence that over the next five years, it will be able to grow its business by up to 27 per cent per year.