YES Bank has signed a share purchase agreement (SPA) with JC Flowers Asset Reconstruction Company (ARC), purchasing a 9.9 percent interest in the ARC for Rs 11.43 per share, the private sector lender said on November 28 after market hours.
YES Bank’s board of directors approved the sale of stressed loans worth Rs 48,000 crore to JC Flowers on September 20 after receiving no other rival proposals.
The bank intends to participate as a minority shareholder in the ARC. “This will be an ancillary to the main line of business of the bank”, it said. JC Flowers ARC had Rs 595 crore in assets under management as of March 31, 2022, with an annual turnover of Rs 19.9 crore.
YES Bank’s standalone net profit fell 32.2 percent year on year to Rs 152.8 crore for the three months ending September 30, 2022. The private lender’s net profit for the same time last fiscal year was Rs 225.50 crore.
Total income during Q2 FY23, on the other hand, increased to Rs 6,394.11 crore from Rs 5,430.30 crore in the same period last year. Gross non-performing assets (NPAs or bad loans) fell to 12.89 percent of gross advances, down from 14.97 percent the previous year.
Prashant Kumar, the bank’s senior executive, believes the GNPA ratio may be reduced to less than 2 per cent when problematic loans are transferred to the ARC.
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