Collapsed Yes Bank’s shares rise 47 per cent after rescue plan

India’s struggling Yes Bank, one of the country’s largest private lenders, which was taken over by the Reserve Bank this month, to prevent the lender’s collapse, reported a $2.5bn quarterly loss and rise in bad loans as authorities prepared for the final stages of a rescue plan to prevent septicity through a financial system already reeling from the shock of coronavirus.

The bank failed for months to find new investors to help offset its mounting pile of non-performing loans. Rana Kapoor, Yes Bank’s billionaire founder was arrested and accused of taking kickbacks which he denies. The bank reported a net loss of $2.5bn compared with a $1bn net profit at the same time a previous year with non-performing assets climbing to 19 per cent compared with 2 per cent previous year.

The lender reported a higher than expected December quarter loss, revealing a near wipe-out of its core equity capital. The bank also informed the exchanges as per globally accepted Basel-III norms.

Under an RBi-sponsored reconstruction scheme, State Bank of India will invest Rs 7250 crore in Yes Bank for a 45-49 per cent stake, other investors include ICICI Bank, HDFC, Kotak Mahindra Bank and Axis Bank. The first two will invest Rs 1, 000 crores each and the latter two Rs 500 crore. AS per the Reserve Bank Mandate SBI will have to at least keep a 26 per cent stake in the bank for three years.