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India’s Yes Bank charts growth roadmap after $1b capital raising

Reuters . Mumbai
05 Aug 2022 00:00:00 | Update: 05 Aug 2022 00:09:48
India’s Yes Bank charts growth roadmap after $1b capital raising
A customer tries to look into a Yes Bank branch in Mumbai, India – Reuters photo

Two years after India’s central bank had to step in to take control of Yes Bank to calm panicky depositors and stem systemic risk, the lender is aiming to expand its loan book and acquire smaller rivals to revive its business, its chief executive said.

The expansion plan of the mid-sized lender (YESB.NS) comes after it raised $1.1 billion last week by selling up to a 10per cent stake to Carlyle Group and Advent International. The fundraising marked a rare vote of confidence in Yes Bank, which had to be taken over by the central bank in March 2020 after months of deterioration in its financials and allegations of mismanagement.

The bank also managed to raise the capital, its first since July 2020, at a time when the outlook for the banking sector in many overseas markets has dimmed due to slowing economic growth, which is expected to weigh on asset quality and loan demand.

Yes Bank is looking to increase its loan book by 15per cent in the fiscal year ending March 2023 as it sharpens its focus on mortgages, vehicle loans and small and mid-sized business loans, said CEO Prashant Kumar.

Its loan book expanded 8per cent in the last fiscal year, slightly lower than the 9.6per cent growth posted by the Indian banking sector, after having contracted in the preceding two years.

“We will definitely be growing (the loan book) more than what the industry is, but we would not like to make any mistake,” Kumar told Reuters, alluding to the bank’s previous rapid credit expansion that was blamed for its woes.

The bank may also look at acquisitions, tapping into the fresh capital raised.

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