Yes Bank plans to venture into asset management and retail broking in 2008/09 to spread its service offerings and will raise up to $366 million to fund its expansion plans including new branches, a top official said. “Our focus right now is to be a strong domestic bank,” Rana Kapoor, managing director and chief executive officer, told Reuters on Tuesday.

“We will have retail broking with institutional capabilities,” he said, adding the venture would start in the second half of 2008. The retail broking business would help in garnering “sticky” deposits, he said.

The bank, which has 60 branches and plans to take it up to 250 by 2010, will also launch its own asset management firm in November, said Kapoor who founded the bank in 2004.

The bank also plans to form an asset reconstruction company in joint venture with one U.S.-based bank and three Indian state-run banks, he said.

“There will be lot of remedial measures in terms of recovery of bad assets and we see an opportunity in that,” he said, referring to laws enabling quicker recovery of bad loans. The bank sees staff strength rise to 10,000 by 2010 from 3,500 now, he said.

Yes Bank expects to hive off its investment banking division also by 2008/09 and will explore private equity investment for it, Kapoor said.

“It will be a full-blown merchant bank with in-house research capabilities…research will enable us to get more IPO mandates,” he said.

Fund Raising Plans

The bank plans to raise $160-175 million by March by selling 20 million shares or 6.36 percent of the expanded capital through a private placement or qualified institutional placement, Kapoor said adding talks are on with investors and merchant bankers.

“We want to broadbase our investor base,” he said. Thereafter, it would also raise 5-7.5 billion rupees as Tier-II capital, he said.

In October, the bank issued 14.7 million shares or 4.99 percent to Singapore’s Orient Global Tamarind Fund Pte Ltd on a preferential basis to raise 3.31 billion rupees. Yes Bank expects to invite a strategic investor in the bank after the Reserve Bank of India reviews its guidelines on foreign ownerships in Indian banks in 2009.

“We will invite a global leader,” he said adding the management would be comfortable with diluting 20-26 percent if regulations permitted.

“We are in long-term talks with global leaders who either do not have presence in India currently or have limited presence,” he said. “It would interest us only if they do not have a significant presence here,” he added.

Rabobank International Holding owns nearly 20 percent of Yes Bank.

Sourced From: Yes Bank Ltd

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