<p>The fund houses that the embattled YES Bank has approached for raising funds have declined to bail out the bank in face of its bulging contingent liabilities and declining CASA ratio.</p>.<p>According to three different sources in the know, the bank had approached many fund houses to raise at least $250 million (about Rs 1,775 crore), which no one was willing to give them. </p>.<p>Top-level officials at the fund houses that YES Bank had approached for the bailout told DH they were unwilling to put any of their money in the bank, as the ambiguity over its contingent liabilities makes it difficult to value. “They have contingent liabilities arising out of both legal as well as business issues,” one of the fund house heads told DH.</p>.<p>Despite repeated attempts, the bank declined to comment on the queries sent by DH. </p>.<p>Contingent liabilities at the end of the June quarter for YES Bank stood at an astounding Rs 6.7 lakh crore. A contingent liability is a potential liability that may occur, depending on the outcome of an uncertain future event. A contingent liability is recorded in the accounting records if the contingency is likely and the amount of the liability can be reasonably estimated.</p>.<p>The contingent liabilities of the bank are 1.8 times of their balance sheet size -- which has seen a decline of 2.5% in the first quarter of the current financial year. At the end of June 2019, the balance sheet size of the bank stood at Rs 3.71 lakh crore, declining sequentially from Rs 3.80 lakh crore for the quarter ended March 2019. Since March 2017, the bank’s contingent liabilities have increased by Rs 2.9 lakh crore.</p>.<p>The bank, according to the same sources, needs a minimum of $1 billion (about Rs 7,100 crore) in immediate bailouts, as its CASA ratio has drastically declined. CASA -- the ratio of deposits in current and savings accounts to total deposits -- stands at a paltry 30.2%, the lowest in the industry.</p>.<p>“As has been publicly disclosed, one of the promoter entities of YES Bank sold a part of its stake on Thursday. This sale was effected purely to deleverage the debt of this entity,” the bank said in a BSE filing on Friday.</p>.<p>On Thursday, Morgan Credits Pvt Ltd (MCPL) sold 2.3% shareholding in the bank. “The proceeds will be solely utilised to prepay the portion of outstanding Non-Convertible Debentures (NCDs) of MCPL subscribed by various schemes of Reliance Nippon Life Asset Management,” the company said. The company, listed as one of the promoters of the bank, held a 3.03% stake in the bank.</p>.<p>Over the past year, the bank has seen its market value deplete by over 90%, and is currently trading at Rs 55.45, less than half of its book value per share.</p>
<p>The fund houses that the embattled YES Bank has approached for raising funds have declined to bail out the bank in face of its bulging contingent liabilities and declining CASA ratio.</p>.<p>According to three different sources in the know, the bank had approached many fund houses to raise at least $250 million (about Rs 1,775 crore), which no one was willing to give them. </p>.<p>Top-level officials at the fund houses that YES Bank had approached for the bailout told DH they were unwilling to put any of their money in the bank, as the ambiguity over its contingent liabilities makes it difficult to value. “They have contingent liabilities arising out of both legal as well as business issues,” one of the fund house heads told DH.</p>.<p>Despite repeated attempts, the bank declined to comment on the queries sent by DH. </p>.<p>Contingent liabilities at the end of the June quarter for YES Bank stood at an astounding Rs 6.7 lakh crore. A contingent liability is a potential liability that may occur, depending on the outcome of an uncertain future event. A contingent liability is recorded in the accounting records if the contingency is likely and the amount of the liability can be reasonably estimated.</p>.<p>The contingent liabilities of the bank are 1.8 times of their balance sheet size -- which has seen a decline of 2.5% in the first quarter of the current financial year. At the end of June 2019, the balance sheet size of the bank stood at Rs 3.71 lakh crore, declining sequentially from Rs 3.80 lakh crore for the quarter ended March 2019. Since March 2017, the bank’s contingent liabilities have increased by Rs 2.9 lakh crore.</p>.<p>The bank, according to the same sources, needs a minimum of $1 billion (about Rs 7,100 crore) in immediate bailouts, as its CASA ratio has drastically declined. CASA -- the ratio of deposits in current and savings accounts to total deposits -- stands at a paltry 30.2%, the lowest in the industry.</p>.<p>“As has been publicly disclosed, one of the promoter entities of YES Bank sold a part of its stake on Thursday. This sale was effected purely to deleverage the debt of this entity,” the bank said in a BSE filing on Friday.</p>.<p>On Thursday, Morgan Credits Pvt Ltd (MCPL) sold 2.3% shareholding in the bank. “The proceeds will be solely utilised to prepay the portion of outstanding Non-Convertible Debentures (NCDs) of MCPL subscribed by various schemes of Reliance Nippon Life Asset Management,” the company said. The company, listed as one of the promoters of the bank, held a 3.03% stake in the bank.</p>.<p>Over the past year, the bank has seen its market value deplete by over 90%, and is currently trading at Rs 55.45, less than half of its book value per share.</p>
