Foreign banks eye stake in Yes Bank

MUMBAI: Two leading foreign banks have evinced an interest in picking up to 4.9% stake in Yes Bank. "Foreign banks have shown an interest in us and we will be receptive to good deals. But no specific initiative in this regard is on presently," Yes Bank MD & CEO Rana Kapoor said.

A tie-up would help Yes Bank add muscle to its trade-finance and cross-border transaction capabilities besides enhancing its global distribution reach, Kapoor said.

He, however, declined to divulge the names of the two foreign banks but said that "only American and European banks interest us presently." He denied reports that HSBC and Standard Chartered Bank had indicated any interest in Yes Bank.

"Yes Bank has a huge agri and life-sciences clientele and a tie-up with a foreign bank would help us service our clients better," he said.

Asked when a tie-up could be expected, Kapoor said that "no time-frame has been set for the purpose." Yes Bank was, however, planning to raise $150-175 million before March-end and roping in a foreign bank could be one way of doing this, he said.

"However, we are open to other routes as well, such as a private placement, QIP, etc," he said adding that the capital would be raised by issuing additional shares.

Categorically ruling out ceding management control to any outside entity, Kapoor said that under no condition would the promoters' holding be allowed to drop below 30%. Presently, it stands at 34%.

The bank already has foreign holding with marquee investors holding stakes. While Netherlands-based RaboBank holds an 18% stake, Global Orient of Singapore holds 4.99%. Swiss Re holds 3.4%.

"We want to raise capital to fuel our rapid expansion," Kapoor said.