Banking wrap: Yes Bank gets offers worth $3 billion for capital infusion, IndusInd Bank picks new MD & CEO

While Yes Bank’s second highest quarterly loss of Rs 600.8 crore for the July-September period was no reason to cheer for, markets found solace in the fact that the private lender had been successful in attracting investor interest from across the globe to infuse capital.

The bank also reported a spurt in slippages and rise in bad loan ratios for the second quarter. However, a timely equity infusion may come to its rescue, analysts said.

Investors are in discussion with Yes Bank to pump in capital of around $3 billion, the bank said on November 1.

The bank had disclosed that one of the investors in discussion for $1.2 billion capital is a family office in the US.

A fresh equity infusion for Yes Bank, which was in dire need of capital, would not only breathe life back into the bank and set it on a turnaround path, but also allay fears of going under the regulator’s Prompt Corrective Action (PCA), analysts said.

After witnessing steep erosion in its market value in the past one year, YES Bank seems to have finally managed to wriggle out of a rut. The private lender on October 31 announced that it has received a binding offer of $1.2 billion from a global investor.

The bank said that the capital infusion via issuance of fresh equity shares would be subject to regulatory approvals, as well as the bank’s board and shareholders.

Sumant Kathpalia has been chosen by private sector lender IndusInd Bank as the successor to Romesh Sobti, sources said on November 1. Kathpalia is the head of consumer loans at the Hindujas-promoted lender and his name has been forwarded to the Reserve Bank for approval, they said.

Top Indian private lenders are going aggressive on branch expansion and are raking up retail deposits even as credit pick up remains slow.

HDFC BankICICI Bank and Axis Bank have together added 799 new domestic branches in the first six months of current financial year and plan to add more going ahead.

Bank of India, that plans to access capital markets to raise funds by end of this financial year, expects bad loans to ease in coming quarters even as stressed assets spiked in the second quarter.

N Damodaran, Executive Director, Bank of India, said the lender aims at reducing the level of gross non-performing assets (NPAs) to below Rs 58,000 crore by March 2020, from Rs 61,476 crore in July-September quarter.

Three banks have posted a divergence in their net NPAs for FY19 on November 1 a day after market regulator SEBI put in place tighter disclosure norms.

As per the disclosures made by the lenders through exchange filings, state-owned Indian Bank has reported a divergence of Rs 820 crore in its net non-performing assets (NPAs) for 2018-19, while private sector Lakshmi Vilas Bank (LVB) reported its net NPA divergence to the tune of Rs 54.9 crore in the last fiscal.