Gain insights into Yes Bank’s official stance regarding speculation surrounding SBI’s stake sale via a block deal. Explore the background of Yes Bank’s reconstruction scheme, RBI’s intervention, and the bank’s latest financial performance, as it charts a strategic course amidst market dynamics.
Clarification from Yes Bank
Today, Yes Bank made it clear that there’s no truth to the reports circulating about negotiations regarding a stake sale by SBI through a block deal.
In an official statement, Yes Bank addressed the speculations, stating they haven’t been involved in any such discussions. Therefore, they’re unable to comment on the article or its potential impact.
Media outlets had suggested that India’s largest lender might be considering selling shares worth Rs 5,000-7,000 crore in a block deal, with no taxes applicable on the sale.
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Background on Yes Bank’s Reconstruction Scheme
It’s worth recalling that in July 2022, Yes Bank’s board had proposed exiting the reconstruction scheme. This scheme, initiated in March 2020, saw eight banks led by the State Bank of India acquiring stakes. As of December 2023, State Bank of India holds 26.13% of Yes Bank, while HDFC Ltd and ICICI Bank hold 3% and 2.61% respectively.
Back in March 2020, RBI took over YES Bank due to financial troubles, appointing Prashant Kumar, former State Bank of India CFO, as the administrator. Mounting bad loans and challenges in raising capital, compounded by governance issues, had contributed to the bank’s decline in 2020.
Financial Performance Highlights
In the latest financial update, for Q3 FY24, YES Bank reported a net profit of Rs 231 crore, marking a significant increase year-on-year and a slight uptick quarter-on-quarter. Net interest income (NII) also saw an increase both year-on-year and quarter-on-quarter, reaching Rs 2,017 crore. The net interest margin (NIM) for the quarter improved slightly quarter-on-quarter but dipped compared to the previous year.
Growth in Loan Disbursements
During its earnings call, the bank emphasized its focus on yield accretive segments, anticipating that a growing share of retail loans would support margins. Net advances showed growth both year-on-year and quarter-on-quarter, reaching Rs 2.2 lakh crore, with retail and SME loans accounting for 63% of the portfolio. Disbursements for the quarter totaled Rs 28,498 crore, with significant allocations to retail assets, rural loans, SME loans, and mid-corporate loans.
Bhaarat Bulletin’s Shikha Rai, Bimal Dev and Yes Bank have contributed to the above report