Yes Bank in talks to raise capital: CEO, Ravneet Gill

Sept quarter performance shows ability to overcome operational challenges & boost growth, said Bank CEO.

Yes Bank is engaged in talks with private equity funds and family offices to raise capital, and its September quarter performance on key operating parameters points to the lender’s ability to overcome operational challenges and boost growth, CEO Ravneet Gill told ET in an interview on Tuesday.

“The quality of investors and ability to invest serous money into the bank is unquestionable with respect to each one of these,” Gill said, referring to various categories of potential investors into the Mumbai-based lender, and their likely ownership thresholds.

Depositors and borrowers have continued to repose faith in the bank, and the lender is expanding business at a handsome rate, Gill said.


‘Quality Investor Base'
This has made the just-concluded September quarter one of the most promising in its recent history, he said. “In the quarter just ended, we opened more savings accounts than we have ever done before,” Gill said. “Our new fixed deposits were up 39% quarter on quarter and our overall liabilities were very much in line with the quarter before that, and our CASA was exactly as in the last quarter — at 30% plus.”

Gill’s comments came on a day of pronounced weakness in Indian banking stocks, with 10 of the 12 Bank Nifty counters declining — several in excess of 5%. Yes Bank fell 22%, and the extent of recent declines might have a bearing on the quantum of dilution during the targeted capital raise. But the bank has a quality investor base to tap into, Gill said. “Given that the market cap has come down and the dilution would be larger, I think it will have to be a mix of investors from each of the buckets because there will be restrictions on how much one investor can hold,” said Gill.

There is no correlation between the inherent strength of the bank and the current market price, Gill said. Tuesday’s secular decline in banking and financial stocks also hurt Indiabulls Housing Finance, Lakshmi Vilas Bank, IndusInd Bank and RBL Bank, with the banking decliners dragging down broader indices. Gill also said Yes Bank’s loans to Indiabulls Housing are well collateralised, and that the exposure is declining.
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“If you look at the whole issue around Indiabulls, the conduct of this account has been outstanding, and we have not had even a day’s delay,’’ Gill said, referring to its advances to the non-banking financier. “Last week, there was a large repayment and it was met on time. Over the last two quarters, we have reduced our exposure to Indiabulls by 30%. This exposure is well collateralised.”
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