YESBANK

Adds Shriram Finance filing saying media report was 'speculation' in paragraph 6 and shares move in paragraph 10

Oct 1 (Reuters) - Japan's Mitsubishi UFJ Financial Group 8306.T is in advanced talks to buy a 20% stake in Indian non-banking finance company Shriram Finance SHMF.NS for 232 billion rupees ($2.61 billion), the Economic Times reported on Wednesday, citing people familiar with the matter.

A deal would mark the latest move by a Japanese financial institution to acquire a stake in an Indian firm, following the banking arm of rival Sumitomo Mitsui Financial Group 8316.T building a 24.2% holding in Mumbai-based Yes Bank YESB.NS.

Facing a shrinking domestic market and years of rock-bottom interest rates, Japan's biggest banks have enthusiastically sought out targets overseas over many years.

MUFG - Japan's largest lender by assets - owns a 23.62% stake in Wall Street investment bank Morgan Stanley MS.N.

The Japanese bank declined to comment on the report, while Shriram Finance did not immediately respond to a Reuters request for comment.

Shriram Finance, in an exchange filing on September 30, said it had received a media query regarding a potential majority stake sale and dismissed the report as speculation. It said it had no knowledge of any deal or any shareholder intent to sell.

The investment will be through a primary issuance via a preferential allotment and will not entail any secondary sale of shares, the newspaper said, adding that both MUFG and Shriram Finance have signed an exclusivity agreement on negotiations.

The Tokyo-based banking leader is, however, not averse to taking a higher stake in the company or even a controlling interest, over time, the report said.

Shriram Finance reported an 8.8% year-on-year rise in standalone profit of 21.56 billion rupees for the quarter ended on June 30. Its results were slightly below the analysts' average estimate of 21.91 billion rupees, according to data compiled by LSEG.

Shriram Finance shares listed on the National Stock Exchange of India rose 3.5% on Wednesday after the Economic Times report.

($1 = 88.8040 Indian rupees)

(Reporting by Gnaneshwar Rajan, Mrinmay Dey, Yagnoseni Das in Bengaluru and Anton Bridge in Tokyo; Editing by Subhranshu Sahu, Muralikumar Anantharaman and Tom Hogue)

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Adds context in paragraph 2, details on alliance and analyst comment in paragraphs 5-9.

By Anton Bridge

Sept 19 (Reuters) - Japan's Sumitomo Mitsui Banking Corp, the banking arm of Sumitomo Mitsui Financial Group 8316.T, will invest a further 135 billion yen ($912.84 million) in U.S. investment bank Jefferies JEF.N, the companies said in a statement on Friday.

The move deepens the firms' alliance, which dates from 2021, and comes after SMBC raised its holding in India's Yes BankYESB.NS this week, as it and other Japanese institutions seek out opportunities overseas.

The investment will take SMBC's stake to up to 20% from 14.5%. The two companies will also set up a joint venture in Japan to consolidate their wholesale Japanese equities businesses, the statement said.

The new entity will oversee the firms' equity capital markets operations, research and sales and trading from a target launch date of January 2027.

As the Japanese stock market is booming with larger deal sizes, more global deals and increased capital flows from overseas, the alliance with Jefferies will allow SMFG's securities arm - SMBC Nikko - to better meet issuer and investor demand, SMBC Executive Officer Takashi Morita told a press briefing.

STAKE EXPECTED TO BOOST PROFIT BY FIFTH YEAR

The bank estimates the Jefferies stake will contribute 50 billion yen to profit by the fifth year, of which 10 billion yen would come from the equity joint venture.

"SMBC Nikko may be able to get more inbound M&A interest from U.S. financial firms where it may not have the trusted relationships in the U.S. that Jefferies does," said Travis Lundy, an analyst who publishes on Smartkarma.

"More perhaps it gets SMBC a potentially much better seat at the table for providing LBO financing," Lundy added.

SMBC will provide Jefferies with $2.5 billion of new credit facilities to be used for leveraged lending in EMEA and pre-listing lending in the United States, the statement added.

SMFG, Japan's second largest banking group, started working with Jefferies in 2021 on cross-border mergers and acquisitions and leveraged finance. It first took a stake in 2023, and has since raised it multiple times.

Nothing has been decided with regard to further investment in the future, SMBC's Morita said.

SMBC is not the only Japanese bank to secure a foothold in the U.S.

Larger rival Mitsubishi UFJ Financial Group 8306.T invested in Morgan Stanley MS.N in 2008 and currently holds a 23.62% shareholding, while number three player Mizuho Financial Group 8411.T acquired U.S. M&A advisory Greenhill in 2023.

(Reporting by Gnaneshwar Rajan in Bengaluru, Anton Bridge in Tokyo and Kane Wu in Hong Kong; Editing by Kirsten Donovan and Sharon Singleton)

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Sept 18 (Reuters) - India's federal investigating agency said on Thursday it has filed chargesheets in cases connected to "fraudulent" transactions between Anil Ambani's companies, Yes Bank YESB.NS and firms owned by the lender's former top boss.

Central Bureau of Investigation (CBI) said that Yes Bank invested over 50 billion rupees ($567.21 million) in two Ambani-controlled companies in 2017, with approval from the bank's former CEO Rana Kapoor, despite rating agencies flagging financial risks.

The agency said the funds were later siphoned off, demonstrating a systematic diversion of public money.

CBI said that Kapoor "abused" his position to channel Yes Bank's funds into financially troubled Ambani group firms, which in return extended concessional loans to companies linked to Kapoor's family.

The arrangement resulted in a loss of 27.97 billion Indian rupees ($317.29 million) to Yes Bank and led to unlawful gains for Ambani's firms and the companies linked to Kapoor's family, CBI said.

Anil Ambani's spokesperson and Rana Kapoor did not immediately respond to Reuters' requests for comment.

($1 = 88.1540 Indian rupees)

(Reporting by Nishit Navin; Editing by Shinjini Ganguli)

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TOKYO, Sept 17 (Reuters) - The banking arm of Sumitomo Mitsui Financial Group 8316.T has agreed to buy an additional 4.2% stake in India's Yes Bank YESB.NS from an affiliate of Carlyle Group CG.O for 51 billion yen ($349 million), it said on Wednesday.

Sumitomo Mitsui Banking Corporation, Japan's second largest lender by assets, also said it had now completed its acquisition of an initial 20% stake in the Mumbai-based bank, in a deal first announced in May.

($1 = 146.2800 yen)

(Reporting by Anton Bridge
Editing by Mark Potter)

(([email protected];))

** Shares of Yes Bank YESB.NS climb 3% to 20.14 rupees

** Private sector bank set for best day since early June, if gains hold

** On Tuesday, competition regulator approved Sumitomo Mitsui Banking Corporation's stake purchase in YESB

** SMBC signed a deal in May for a 20% stake, has RBI approval to purchase total 24.99% stake

** Nine analysts tracking stock rate it "sell" on average; median PT is 17 rupees - data compiled by LSEG

** YTD, stock turns positive, last up almost 3%

(Reporting by Nandan Mandayam in Bengaluru)

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Sept 2 (Reuters) - India's competition regulator said on Tuesday it had approved Japanese company Sumitomo Mitsui Banking Corporation's stake purchase in Indian lender Yes Bank YESB.NS.

SMBC in May had inked a deal to take a 20% stake in Yes Bank for $1.6 billion, making it the largest cross-border merger and acquisition deal in India's financial sector.

(Reporting by Nishit Navin; Editing by Shreya Biswas
)

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** Indian lender Yes Bank YESB.NS gains as much as 4.8%; last up 2.3% at 19.8 rupees

** Japan's Sumitomo Mitsui Banking Corporation (SMBC) SUMFDS.UL gets Indian central bank nod to buy up to 24.99% of Yes Bank

** SMBC inked deal to buy 20% stake in YESB for $1.6 billion in May; Reuters reported in July, citing sources, that SMBC was seeking approval to buy an additional 4.9% in YESB

** Stock set for best day since early June

** YESB is rated "sell" on avg, median PT is 17 rupees - data compiled by LSEG

** Stock is up 1.1% so far in 2025

(Reporting by Manvi Pant in Bengaluru)

(([email protected]; +918447554364;))

MUMBAI, Aug 23 (Reuters) - Japan's Sumitomo Mitsui Banking Corporation SUMFDS.UL has received Indian central bank approval to buy up to 24.99% of India’s Yes Bank YESB.NS, the Indian bank said in a stock exchange filing on Saturday.

The Reserve Bank of India has also decided that SMBC would not be treated as a "promoter" of Yes Bank following the deal, which would have involved additional regulatory requirements, Yes Bank said.

In May, the banks informed exchanges that SBMC had inked a deal to take a 20% stake in Yes Bank for $1.6 billion, making it the largest cross-border merger and acquisition deal in India's financial sector.

Sources familiar with the matter told Reuters last month that SMBC was seeking approval to buy an additional 4.9% stake in Yes Bank.

(Reporting by Jayshree P Upadhyay
Editing by Mark Potter)

(([email protected]; 9920092491; Reuters Messaging: Twitter: @jaysh88))

Adds comments from Reliance Group source in paragraphs 5-6, government source in paragraphs 18, 19

By Nikunj Ohri

NEW DELHI, July 24 (Reuters) - India's financial crime-fighting agency searched 35 locations linked to Reliance Anil Ambani Group as part of an investigation into alleged money laundering and siphoning of public funds, a government source said on Thursday.

The Enforcement Directorate alleges the group orchestrated a "well-planned" scheme to siphon off 30 billion rupees ($350 million) in loans from YES Bank YESB.NS to many shell companies between 2017 and 2019, the source said on condition of anonymity, as he was not authorised to speak to the media.

Anil Ambani's Reliance Group entities are accused of paying bribes to YES Bank officials before loans were disbursed, the source said, adding that loan approvals violated the bank’s processes.

The probe also found gross violations in YES Bank’s loan approval process, such as lending to companies with weak financials, backdating credit memos, "evergreening" loans - issuing fresh loans to avoid labelling assets as non-performing - and misrepresenting financials.

A Reliance Group source said YES Bank had granted loans to Anil Ambani's entities after following the due process, and the entire exposure was fully secured.

The allegation that bribes were given to secure loans was incorrect, the source said, adding that Reliance Home Finance (RHFL) extended fully secured loans on merit to privately-held companies of Rana Kapoor, the erstwhile promoter of YES Bank.

These loans were fully repaid, including interest, the source said.

Representatives for Reliance Group and YES Bank did not respond to requests for comment.

Several group firms of Anil Ambani, the younger brother of billionaire Mukesh Ambani, have gone into bankruptcy since 2017.

YES Bank, from which Anil Ambani group firms had borrowed heavily, was declared insolvent in 2020 and rescued by a group of Indian lenders in a plan approved by the central bank. Japan's Sumitomo Mitsui Banking Corp is seeking a 20% stake in a deal that has yet to get regulatory approval.

Kapoor was charged with bank fraud by the financial crime agency in 2020 and later arrested. He pleaded not guilty and was granted bail in 2024 by a special court in India's financial capital of Mumbai, according to local media reports.

REGULATORY ACTIONS

The financial crime agency can now seize or attach assets of Anil Ambani entities as the "proceeds of crime", said Debopriyo Moulik, a lawyer at India's Supreme Court. However, the group companies can challenge the agency's findings in court, he said.

Anil Ambani's group entities have been subject to several regulatory actions in recent years. In August 2024, the markets regulator SEBI barred Anil Ambani and 24 others from securities markets for five years, citing fund diversion from Reliance Home Finance.

The markets regulator has shared findings of its investigation on Reliance Home Finance with the financial crime agency, which is likely to investigate a sharp rise in corporate loans granted by the finance company, the source said.

Shares of Reliance Infrastructure RLIN.NS and Reliance Power RPOL.NS fell as much as 5% on Thursday after the news of the latest probe.

The companies issued similar statements to Indian stock exchanges saying the agency's actions "have absolutely no impact on the business operations, financial performance, shareholders, employees, or any other stakeholders" of the two companies.

"The media reports appear to pertain to allegations concerning transactions of Reliance Communications Limited (RCOM) or Reliance Home Finance Limited (RHFL) which are over 10 years old," the statements said.

However, the government source said the agency's investigation found Reliance Infrastructure diverted over 100 billion rupees disguised as inter-corporate deposits (ICD) to other Reliance group entities through an undisclosed, but related entity. ICDs are unsecured loans extended by one company to another.

An undisclosed related entity was used to bypass approvals from shareholders and the audit committee, the source said. The Reliance Group did not immediately respond to a separate Reuters' request seeking a comment on these allegations.

Reliance Group's businesses range from defence to power and infrastructure, although Ambani himself is not on the boards of any listed entities, following orders passed by the market regulator, which Ambani has challenged.

($1 = 86.3300 Indian rupees)

(Reporting by Nikunj Ohri in New Delhi; Writing by Shubham Batra; Editing by William Mallard and Rachna Uppal)

(([email protected]; X: @MukherjeeHritam;))

The author is a Reuters Breakingviews columnist. The opinions expressed are her own. Updates to add graphic.

By Shritama Bose

MUMBAI, July 22 (Reuters Breakingviews) - State Bank of India SBI.NS looks like it's about to become a more frequent capital raiser. This week the country's largest lender, which is 57%-owned by New Delhi, sold 250 billion rupees ($2.9 billion) worth of shares. The rationale was to increase its equity ratios. Yet, even though the deal is India's largest-ever secondary stock placement to institutions, it hardly moves the needle. Ideally, a company wanting to bolster its balance sheet would trim dividends first. But the government wants state-run companies to bump up these payments by 25%.

Oddly, the bank doesn't appear to need to increase its capital. At 10.8%, its common equity Tier 1 (CET1) ratio is above the regulatory minimum of 8.8%. SBI Chair C.S. Setty said in May the bank has enough "firepower" as it stands to grow its loan book by up to 8 trillion rupees ($93 billion), or 19%.

The issue seems to be that SBI's CET1 ratio is below the 14% average for the Indian banking sector and even further behind the 16% and 18% buffers at privately held peers ICICI Bank ICBK.NS and HDFC Bank HDBK.NS. Since both those rivals trade at higher multiples to book than SBI, there's some logic to wanting to catch up.

The share sale doesn't get it very far, though. SBI has some $421 billion of risk-weighted assets, so the extra $2.9 billion only takes its CET1 ratio to 11.5%.

The additional capital has another effect of reducing the lender's return on equity: apply it to the most recent financial year, and the 17% ROE, per LSEG, would drop by just under a percentage point. That would, on paper, still leave it besting HDFC's 14% showing and lagging ICICI's 18%. But both are cranking out those numbers with much higher capital. Moreover, SBI's ROE is looking harder to sustain with bank credit growing at just over 9%, its slowest pace in three years.

Perhaps Setty and his executives are comfortable with only slightly narrowing its capital gap to peers. Assuming they're not, they have two options: sell more shares or sell more assets. Earlier this year, for example, SBI offloaded a 13% stake in Yes Bank YESB.NS to Sumitomo Mitsui Financial Group 8316.T. The lender could follow that up with peddling its remaining 11% chunk in Yes, or selling or listing its general insurer and its asset management subsidiary.

That'll keep SBI and its bankers busy for a while.

Follow Shritama Bose on LinkedIn and X.

CONTEXT NEWS

State Bank of India on July 21 said it had completed a sale of shares worth 250 billion rupees ($2.89 billion) to institutional investors. Books were covered 4.5 times, and foreign long-term investors bought 24% of the float, the lender said.

SBI priced the issue at 817 rupees per share, a 1.8% discount to the closing price of 831.70 rupees on July 16, IFR reported on July 18, citing unnamed people with knowledge of the transaction.

Demand for the transaction was led by domestic institutions, with state-backed Life Insurance Corporation of India committing 80 billion rupees, per IFR. Nomura, Marshall Wace, Millennium, HDFC Mutual Fund, Quant Mutual Fund and ICICI Prudential Mutual Fund also participated in the issue, the report added.

(Editing by Antony Currie; Production by Ujjaini Dutta)

((For previous columns by the author, Reuters customers can click on BOSE/[email protected]))

** Shares of Yes Bank YESB.NS rise as much as 3.3% to 20.7 rupees, before trimming losses to trade 1% higher

** Japan's Sumitomo Mitsui Financial Group 8316.T to eye $1.1 bln additional investment in Yes Bank to acquire additional 5% stake, Bloomberg reports, citing sources

** Sumitomo Mitsui Banking Corp, the banking unit of SMFG, had earlier signed a definitive agreement to acquire 20% stake in YESB for $1.58 bln

** Yes Bank did not immediately respond to Reuters' request for comment

** Avg rating of 11 analysts is "sell", median PT is 17 rupees - data compiled by LSEG

** YESB up ~3% YTD

(Reporting by Anuran Sadhu in Bengaluru)

(([email protected]; +91 8697274436;))

June 23 (Reuters) - Reliance Infrastructure Ltd RLIN.NS:

• RELIANCE INFRASTRUCTURE LTD - JR TOLL ROAD PAYS 2.73 BILLION RUPEES DEBT TO YES BANK

Source text: ID:nBSE8Hz8tt

Further company coverage: RLIN.NS

(([email protected];))

June 17 (Reuters) - Yes Bank Ltd YESB.NS:

• RECEIVED 780 MILLION RUPEES FROM A SINGLE TRUST , IN SECURITY RECEIPTS PORTFOLIO

Further company coverage: YESB.NS

(([email protected];;))

June 13 (Reuters) - Yes Bank Ltd YESB.NS:

• MOODY'S RATINGS: UPGRADES INDIA'S YES BANK TO BA2 FROM BA3; CHANGES OUTLOOK TO STABLE

Source text: [ID:]

Further company coverage: YESB.NS

(([email protected];;))

** Yes Bank YESB.NS shares fall 8.6% to 21.28 rupees

** YESB top pct loser on Nifty Private Bank index .NIFPVTBNK, which is down 0.7%

** More than 756 million shares traded in 260 block deals on NSE at 21.07-22.93 rupees apiece, a 1.5%-9.5% discount to last close of 23.28 rupees - as per data compiled by LSEG

** Stock set to snap three sessions of gains

** Overall trading volume at 1.03 billion shares, 5.8x the 30-day average

** Separately, bank to consider raising funds today via issuance of shares, debt securities

** YTD, stock up 8.6%

(Reporting by Vijay Malkar)

(([email protected];))

May 28 (Reuters) - Yes Bank Ltd YESB.NS:

• YES BANK LTD - BOARD MEETING SCHEDULED FOR JUNE 03 TO CONSIDER FUND RAISING

Further company coverage: YESB.NS

(([email protected];))

May 9 (Reuters) - Bandhan Bank Ltd BANH.NS:

• SALE OF HOLDING IN YES BANK LIMITED

• TO SELL 15,39,34,975 YES BANK SHARES

• TO SELL 15,39,34,975 EQUITY SHARES OF YES BANK LIMITED, AT A RATE OF 21.50 RUPEES

• SHAREHOLDING IN YES BANK REDUCED TO 0.21%

Source text: ID:nBSE2fM4bk

Further company coverage: BANH.NS

(([email protected];;))

May 6 (Reuters) - Japan's Sumitomo Mitsui Banking Corp (SMBC) is in advanced discussions to buy a significant stake in India's Yes Bank YESB.NS, the Economic Times reported on Tuesday, citing people aware of the matter.

The move is expected to trigger an open offer for an additional 26% Yes Bank, the report added.

(Reporting by Ashish Chandra in Bengaluru)

(([email protected]; +91 7982114624;))

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Shritama Bose

MUMBAI, April 30 (Reuters Breakingviews) - Casualties are piling up in India's war for bank deposits. The CEO of $8 billion IndusInd Bank INBK.NS stepped down on Tuesday after accounting and lending woes nixed almost half its market value. The shambles is the most high-profile fallout of the banking industry's intense fight for low-cost funds in the country that has wrong-footed executives, shareholders and watchdogs.

Sumant Kathpalia is trying to distance himself from the mess caused on his watch, which includes rising losses on microfinance loans. He is resigning, he said, to take "moral responsibility" for a derivatives lapse that shaved 2.27% off the bank's net worth when it came to light a month ago. His deputy also stepped down on Monday.

The Reserve Bank of India had insisted on the exits, Reuters reported. But the regulator was initially intending for the lender to find replacements first, which is why it approved a one-year extension to Kathpalia's tenure just last month.

The saga bears the markers of perverse incentives. At the heart of the controversy is IndusInd's long-term foreign currency deposits, which it converted to rupees to fund loan growth without fully accounting for mark-to-market losses. The practice, which stretched back at least six years, effectively inflated profits.

The RBI ushered in new accounting rules for internal derivatives trades in April 2024. Nonetheless, repeated instances of governance crises and RBI action at private lenders from Yes Bank YESB.NS to RBL Bank RATB.NS point to the limits of regulatory effectiveness in an environment of fierce competition.

India's 33 banks are locked in a battle for low-cost deposits. Private lenders, the product of India's 1990s liberalisation, have to compete with state-owned peers which are generally regarded as safer.

There's a newer rival, too: Indians' blooming hopes of making more money by putting their cash into stocks and mutual funds. Bank deposits accounted for 44% of overall household financial assets in March 2024, down from 56% in 2020. The drop, coupled with steady loan growth, has driven banks to increasingly tap short-term debt and attracted health warnings from the RBI.

Management overhauls can hold out hope of a fresh start. But the war for deposits may yet claim more casualties.

Follow @ShritamaBose on X

CONTEXT NEWS

IndusInd Bank on April 29 said its Managing Director & CEO Sumant Kathpalia had stepped down from his role. Kathpalia claimed "moral responsibility" in his resignation letter for an accounting lapse that shaved 2.27% off the bank's net worth.

With the Reserve Bank of India's approval, the lender's board has set up a committee of executives to oversee its operations either for three months from the date of Kathpalia's exit or until a new chief assumes charge, whichever comes first, IndusInd said on April 30.

(Editing by Antony Currie and Ujjaini Dutta)

((For previous columns by the author, Reuters customers can click on BOSE/
[email protected]))

April 22 (Reuters) - Yes Bank Ltd YESB.NS:

• DHAVAN SHAH RESIGNS AS COUNTRY HEAD - SME BANKING

Source text: ID:nBSE7Rx3KQ

Further company coverage: YESB.NS

(([email protected];;))

April 21 (Reuters) - India's top private lenders ICICI Bank ICBK.NS and HDFC Bank HDBK.NS rose nearly 2% each to hit record highs on Monday, after their fourth-quarter results inspired confidence in the companies' ability to deliver strong loan growth and maintain healthy asset quality.

Both lenders reported quarterly results above analyst estimates on Saturday, driven by sustained loan growth and improving asset quality.

The two banks are Jefferies' top picks in the sector, with analysts highlighting their ability to expand lending margins while maintaining credit costs.

($1 = 85.1420 Indian rupees)

(Reporting by Kashish Tandon and Ashish Chandra in Bengaluru; Editing by Janane Venkatraman)

(([email protected]; +91 7982114624;))

MUMBAI, April 19 (Reuters) - India's Yes Bank YESB.NS reported a better-than-expected 63% rise in net profit for the January-March quarter on Saturday, helped by falling loan-loss provisions.

The Mumbai-based private lender's standalone net profit rose to 7.38 billion rupees ($86.39 million) for the financial year fourth quarter from 4.52 billion rupees in the same period a year earlier.

That was above analysts' average forecast of 6.4 billion rupees, according to LSEG data.

Yes Bank's provisions and contingencies, or funds kept aside for potential bad loans, fell 32.5% on-year to 3.18 billion rupees.

Its gross non-performing asset ratio, a key gauge of asset quality, was at 1.60% at end of March, unchanged from the end of the previous three months.

Net interest income, the difference between the interest earned on loans and paid to depositors, rose 5.7% to 22.76 billion rupees.

Its other income, including fees, commissions and interest earned traditional interest-based activities, rose 11% to 15.67 billion rupees.

Its loans grew 8.1% on year, while deposits rose 6.8%.

Net interest margin, a key profitability measure, was 2.50%, up from 2.40% a year earlier and in the previous three months.

Analysts expect banks' net interest margins to be under pressure in the coming quarters following the 50-basis-points rate cut by the Reserve Bank of India since February. That is because the pass-through to loan rates happens faster compared to deposits.

Shares of Yes Bank closed 1.2% higher on Thursday ahead of the results.
($1 = 85.4290 Indian rupees)

(Reporting by Siddhi Nayak in Mumbai; Editing by Raju Gopalakrishnan)

(([email protected]; +91 22 6921 7848; X: https://twitter.com/siddhiVnayak))

** Yes Bank YESB.NS down 4.62% to 17.12 rupees after Q4 business update

** YESB set for biggest one day percentage decline in nearly 3 months

** Shares at lowest level since November 2023

** Co's Q4FY25 performance "mixed, with subdued credit growth," says ICICI Direct Research

** Co's Q4FY25 loans grew by 0.7% q/q while deposits grew 2.6% q/q

** "The slow pace of credit growth may limit near-term margin expansion despite improving liability mix"- brokerage

** Including session's decline, YESB shares down ~31% in the last 12 months

(Reporting by Ananta Agarwal in Bengaluru)

(([email protected]))

March 21 (Reuters) - Yes Bank Ltd YESB.NS:

• YES BANK LTD - DISCLOSES RECEIPT FROM SALE OF NPA PORTFOLIO TO JC FLOWER ARC

Source text: ID:nNSE3ngCb8

Further company coverage: YESB.NS

(([email protected];))

Yes Bank Ltd YESB.NS:

• YES BANK LTD - RECEIVES INCOME-TAX DEMAND OF 1.45 BILLION RUPEES

Source text: ID:nBSE6PJFzt

Further company coverage: YESB.NS

March 13 (Reuters) - Yes Bank Ltd YESB.NS:

• YES BANK LTD - UPDATE ON SALE OF NPA PORTFOLIO TO JC FLOWER ARC

• YES BANK LTD - RECEIVES 820 MILLION RUPEES FROM FROM A SINGLE TRUST IN SECURITY RECEIPTS PORTFOLIO

Source text: ID:nBSE9SW5bW

Further company coverage: YESB.NS

(([email protected];;))

Feb 5 (Reuters) - Yes Bank Ltd YESB.NS:

• YES SECURITIES ALLOTS 2,50,85,603 SHARES TO YES BANK

Source text: ID:nBSE5RHyyk

Further company coverage: YESB.NS

(([email protected];;))

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Shritama Bose

MUMBAI, Jan 23 (Reuters Breakingviews) - A small-loan crisis is creeping up on India’s banks. Bad debt inched up at the $146 billion HDFC Bank HDBK.NS and other private lenders in the three months to the end of December, and the central bank recently warned of a deep rot in small loans. The $2 trillion banking system is better prepared for an asset quality crisis than a decade ago, but a stalling economy could batter its defences.

HDFC’s gross bad loan ratio rose six basis points from the end of September to 1.42%. Axis Bank AXBK.NS doubled its provisions and contingencies from the same three-month period in the previous year to account for defaults on unsecured personal loans, and Kotak Mahindra Bank KTKM.NS raised them by 37%.

India’s banks learnt some lessons from the last blowup in 2015-16, when a string of chunky project loans left their balance sheets bleeding. At 16.7%, their capital as a share of risk weighted assets is nearly four percentage points higher than in 2014. The share of the top 100 borrowers in outstanding loans is down to 15% from 18%. Bad loans are at a 12-year low of 2.6%. And the Reserve Bank of India mandates Indian lenders hold a 2.5% buffer above the 9% minimum capital requirement under Basel III norms. It tightened the screws on unsecured loans in November 2023 to curb excessive risk-taking.

Macroeconomic disruption could mess with that. An RBI stress test revealed that in an extreme scenario where GDP growth slows to around 3% and inflation rises to 7.8%, four banks may breach the minimum capital requirement of 9%.

Mid-sized private banks are prone to that risk. In 2020, Yes Bank’s YESB.NS rivals rescued it from near-failure with cash infusions and months later, Singapore's DBS DBSM.SI acquired another capital-starved lender based in southern India. That’s making markets jittery about private lenders like RBL RATB.NS and IndusInd Bank INBK.NS which specialise in microloans of under $500, the segment where the stress is deepest. The finance chief of IndusInd, which reported surging provisions and a profit drop in the September quarter, resigned on Friday.

So far the risk is limited to only a slice of loans -- unsecured loans account for a quarter of total bank credit. To contain it, banks are easing off on new lending. That in turn could slow GDP growth further. It’s a feedback loop India can ill afford.

Follow @ShritamaBose on X

CONTEXT NEWS

HDFC Bank on Jan. 22 reported consolidated net profit of $2.04 billion for the three months to Dec. 31, 2% higher than in the same period a year earlier. The bank’s gross non-performing asset ratio rose six basis points from the end of September to 1.42%.

IndusInd Bank on Jan. 18 said Chief Financial Officer Gobind Jain resigned from the position on the previous day to pursue other professional opportunities.

(Editing by Antony Currie and Ujjaini Dutta)

((For previous columns by the author, Reuters customers can click on BOSE/
[email protected]))

Jan 3 (Reuters) - Yes Bank Ltd YESB.NS:

• YES BANK LTD - DEC-END LOANS & ADVANCES UP 12.6% Y/Y

• YES BANK - DEPOSITS UP 14.6% Y/Y AS ON DEC END

Source text: ID:nBSE2sW6hG

Further company coverage: YESB.NS

(([email protected];))