Kotak Mahindra Bank Best Suited To Acquire Yes Bank: SBI, Axis Bank Chiefs
According to some industry watchers, acquiring a bank can help Uday Kotak reduce promoter stake in Kotak Mahindra Bank.
Two of India's top bankers on Tuesday said that Kotak Mahindra Bank Ltd. is best suited to acquire smaller and capital-starved rival Yes Bank Ltd.
Yes Bank's capital buffers have dipped on accelerated NPA recognition under Chief Executive Office Ravneet Gill, who took charge earlier this year. Yes Bank’s fundraising plan is also under question, resulting in speculations that the private lender is an acquisition target. This, however, 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," State Bank of India Chairman Rajnish Kumar said at Times Group's India Economic Conclave in Mumbai.
Amitabh Chaudhry of Axis Bank Ltd., agreed. “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,” said the managing director and chief executive officer of the private lender.
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 Kotak Mahindra have been discussed as potential suitors for Yes Bank. According to some industry watchers, acquiring a bank can help Uday Kotak reduce the promoter stake in Kotak Mahindra Bank, and help him get closer to the levels mandated by the Reserve Bank of India.
The regulator has been dragged to the court by Kotak Mahindra Bank for not accepting an earlier attempt at stake dilution. The petition is slated to be heard early next year.
Meanwhile, speaking at the same event, Kotak said there is a need to resist a colonisation 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 colonisation of Indian finance,” Kotak said.
Also Read: Yes Bank Needs an Arranged Match, Or It’s No Bank
Yes Bank had to cut its book size by 7 percent in the September quarter due to the capital constraints. It is looking to finish the fundraising exercise at the earliest.
On Nov. 1, Yes Bank said it has investment offers worth more than $3 billion on the table. Almost a month later, investors backed its plan to raise as much as $ 2billion, including $1.2 billion from Canada’s Erwin Singh Braich. The lender wanted to finalise the fundraising at the Dec. 10 board meeting, but could not.