YES Bank to raise Rs 3k crore via QIP, dilute promoter stake

Yes Bank’s board on Wednesday approved a proposal to raise $500mn through a Qualified Institutions Placement (QIP) issue which would dilute the promoter holding in the bank by nearly 20%. The band board also approved an 80 % dividend while taking into accounts annual results for FY1
A statement issued by the bank said that the board has empowered the bank’s capital raising committee, a sub-committee of the board, to raise up to US$ 500 million in one or more tranches.The issue can be in the form of a QIP or issue of either American Depository Receipts or Global Depository Receipts.
The bank on Wednesday posted posted an 18.8% increase in March quarter profit to Rs 430.2 crore, helped by a healthy increase in non-interest income. The Mumbai-based private bank, embroiled in a legal battle over a board position for the co-promoter's family, had reported a profit of Rs 362.2 crore a year earlier.
The core net interest income grew 12.8% to Rs 719.6 crore on a 15.4% jump in customer assets, while the net interest margin remained flat at 3%.
Driven by transactional revenue and retail banking, non-interest income grew 17.4% to Rs 445.5 crore in the fourth quarter ended March 31, Yes Bank Chief Financial Officer Rajat Monga said. Other components of fee income such as financial markets and financial advisory were tepid during the quarter, he said.
For the full financial year, net profit grew 24.4 % to Rs 1,617.78 crore from Rs 1,300.7 crore a year ago. Total income rose to Rs 3,013.57 crore in the January-March period as compared to Rs 2,667.03 crore in the same period of the previous financial year, Yes Bank said in a statement. The bank is targeting net interest margin of 3.15 % in FY15 and growth of 20 % each in advances and deposits, Monga said.
The share of low-cost current and saving accounts (CASA) deposits stood at 22 % in Q4. Monga said the target of raising it up to 30 % by end of FY15 is difficult but attainable. The ratio of gross non-performing assets climbed to 0.31 % of gross advances from 0.20 % in the year-ago period. Monga said the worst is behind the bank as the situation has peaked.
Provisions for bad assets decreased to Rs 72.29 crore from Rs 97.53 crore in the year-ago period and Monga attributed this to the smaller pipeline of bad assets. Yes Bank shares gained 1.67 % to close at Rs 441.55 on the BSE. The 30-share benchmark Sensex climbed 0.52 %.
Monga parried a question on media reports that the board is to consider an out-of-court settlement with Madhu Kapur, the widow of bank co-promoter Ashok Kapur, on the nomination of directors.