State Bank of India said it will need to invest Rs 2,450 crore ($331 million) if it were to buy a 49% stake in Yes BankNSE 33.13 % as part of a rescue deal of the troubled lender.
SBI Chairman Rajnish Kumar told reporters on Saturday the bank’s capital infusion into rescuing Yes Bank would have a “very marginal” impact on SBI’s capital adequacy ratio.
On Thursday, the Reserve Bank of India (RBI) took control of Yes Bank, imposed limits on withdrawals to protect investors and said it would work on a revival plan.
“The survival of the bank is a must,” Kumar told reporters at a news conference, adding that several investors had approached SBI to form a consortium to pick up the 49% stake. He declined to name any of the investors. “For Yes Bank also, people have reached out. These are all initial discussions and then we will discuss with them, our investment team will discuss with them, work out what are the possibilities which meet with regulatory guidelines,” he said.
However, he said SBI was not in talks with any of Yes Bank’s current shareholders about the investment.
SBI will try to approve the reconstruction of Yes Bank much before the 30-day RBI imposed moratorium ends, Kumar said.
Yes Bank has struggled to raise capital it needs to stay above regulatory requirements as it battles high levels of bad loans. It has been trying to raise more than $1 billion in fresh capital since late last year, and in February delayed its December-quarter results.
Shares in Yes Bank closed 56% lower on Friday.
SBI will not be allowed to reduce its stake to below 26% for at least three years. All instruments issued by Yes Bank which qualify as Additional Tier 1 capital will be written down permanently, according to the RBI’s plan.
Source: Economic Times