First Abu Dhabi Bank on Thursday clarified that it was not evaluating any possible offer for a stake in Indian private lender Yes Bank, as per news agency Reuters.
The Middle Eastern lender was apparently among those evaluating a $5 billion stake in Yes Bank for around 51 per cent, news agency Bloomberg reported on Wednesday citing sources. The other suitors included Japan-based Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. Following this news, shares of Yes Bank jumped as much as 8.5 per cent. The stock has climbed around 25 per cent this year so far.
State Bank of India has reduced its stake in Yes Bank, which it rescued four years ago from a crisis of bad loans. Despite the reduction, SBI remains the largest shareholder with a 24 per cent stake. The impending end of SBI Chairman Dinesh Khara’s tenure in August could potentially delay any deals involving Yes Bank. A government-appointed panel has recommended Challa Sreenivasulu Setty as his successor.
In another positive development for Yes Bank, Moody’s upgraded outlook for the lender to ‘positive’ and affirmed Ba3 rating on it. The change in outlook reflects Moody’s expectations that a gradual improvement in YES Bank’s depositor base and lending franchise will help improve its core profitability over the next 12-18 months.
“We expect that YES Bank’s core profitability, which is measured by pre-provisioning profits to total assets, will gradually improve to above 1.2% over the next 12-18 months from 0.8% in the financial year ended March 2024 (fiscal 2024),” Moody’s said.
Shares of Yes Bank were trading with gains of 5 per cent around 10:30 am while the benchmark indices dipped sharply to around 0.3 per cent.
(With Reuters inputs)
