Macquarie pointed out that Yes Bank's net worth is zero and that there is lack a of clarity on the bank's deposit franchise due to the solvency issues.

 

There have been reports that the government is considering an SBI-led consortium to take over the sick lender.

 

"YES Bank has a net-worth of around Rs 25,000 crore. Its below investment grade book (BB&Below) is around Rs 30,000 crore and BBB book is at around Rs 50,000 crore. If we assume substantial proportion of BB & below book is wiped off and say 10-15 per cent of BBB book is to be written off, it implies the current net worth of the bank is zero (after factoring in 25 per cent tax benefits). Ideally and theoretically speaking, SBI and other PSU banks need to buy the bank at Re 1," Macquarie said in the report.

 

YES Bank's stock rose 26 per cent to Rs 37 per share following the media reports while SBI's shares had fallen nearly 4 per cent after the news but recovered and were later trading 3 per cent higher at Rs 293.

 

"We are unsure of YES Bank's quality of liabilities franchise which perhaps could have been further affected due to the current solvency issues. Consolidation would have brought about a lot of integration challenges as well as legal challenges as we believe SBI Act needs to be amended for SBI to acquire a private sector bank. Even in this case, the deal will require blessings of the regulator as well as the government," Macquarie said.