YES Bank diversifies funding sources

YES Bank raises US$400 million in two transactions in the offshore syndicated loan markets

INDIA’s fifth-largest private sector bank, YES Bank, is raising a total of US$400 million in two transactions in the offshore syndicated loan markets as it further diversifies its funding sources.

The first transaction is a five-year loan amounting to US$250 million raised from a group of Taiwanese banks, led by CTBC Bank, Bank of Taiwan, Mega International Commercial Bank and Land Bank of Taiwan. The deal was upsized from the initial target of US$200 million as YES Bank exercised the green shoe option following an oversubscription of US$355 million from 13 other banks.

This is one of the largest bank participations in a Taiwan loan transaction. The deal was YES Bank’s second syndicated loan in Taiwan following its initial transaction in 2016 when it raised US$130 million, also for five years. That loan attracted the participation of 10 banks, including the mandated lead arrangers CTBC Bank and Taiwan Cooperative Bank.

The second loan, amounting to 16.5 billion yen (US$150 million), represented YES Bank’s first foray in the Samurai loan market. The one-year loan attracted the participation of eight banks with Bank of Tokyo-Mitsubishi UFJ acting as mandated lead arranger and bookrunner.

YES Bank reported strong results in the second quarter of financial year 2018, compared to a year ago net profit is up 25.1% to US$153 million, while net interest income rose 33.5% to US$288.4 million.

The bank is in a robust capital position after raising US$612.7 million in Basel III tier 2 bonds and another US$828.8 million in additional tier 1 securities. Total capital funds stood at US$6.5 billion as of October 24 2017.

Tier 1 capital ratio was higher at 13.2%, compared with 10.1% in the second quarter of financial year 2017, while common equity tier 1 ratio rose from 9.7% to 11.4% during the same period.