‘Kotak Mahindra Bank best suited to acquire Yes Bank’

Two of India’s top bankers on Tuesday opined that Kotak Mahindra Bank (KMB) is best suited to acquire smaller and capital-starved rival Yes Bank.

Yes Bank’s capital buffers have dipped on accelerated non-performing assets recognition under new chief executive Ravneet Gill earlier this year.

The private sector lender’s capital raising plan is also passing through uncertainties and there are speculations on whether Yes Bank is an acquisition target, which has been denied by its management.

“I think Uday (Kotak) is the best candidate to acquire Yes Bank. You need deep pockets, Uday has that,” SBI Chairman Rajnish Kumar said at Times Network’s India Economic Conclave here.

“We (Axis Bank) are a smaller bank. We are trying to ensure that we grow big so that at some stage we can acquire others. So, yes Mr Kotak, they are best suited rather than us,” he said.

When contacted, Kotak Mahindra Group Chief Communication Officer Rohit Rao said, “these are comments made by other bankers and reflect their views, and not ours”.

In the past, both Axis Bank and KMB have been discussed as potential suitors for Yes Bank.

According to some watchers, acquiring a bank can help Uday Kotak reduce the promoter stake in KMB, and help him get closer to the levels mandated by the RBI.

The regulator has been dragged to the court by KMB for not accepting an earlier attempt at stake dilution and the same petition is slated to be heard early next year.

Meanwhile, speaking at the same event, Kotak said there is a need to resist a “colonialisation” of Indian finance, hinting at share sales to foreign investors.

“I’m looking forward to best in class quality but strong Indian-owned and controlled financial sector and while we must attract foreign capital, we must ensure that there is no colonialisation of Indian finance,” Kotak said.

Yes Bank had to cut its book size by 7 per cent in the September quarter because of the capital constraints and has been looking to finish the capital raising exercise at the earliest.

The lender had first announced it has interest from investors of USD 3 billion, and a few days later disclosed offers of USD 2 billion. It wanted to finalise the same at the last board meet on December 10 but was not able to take a decision.

Yes Bank’s share price plummeted to Rs 32 apiece in October as against a high of Rs 400 just a year ago and has been one of the most volatile scrips on the bourses.