SBI Chairman Rajnish Kumar says don’t have money to buy YES Bank; suggests this private lender

The debt-struck YES Bank is struggling with liquidity issues and is seeking to raise billion by issuing fresh equity and weighing a number of offers.

Amid buzz that the SBI may come to the aid of YES Bank, chairman of India’s largest bank by assets Rajnish Kumar denied reports saying it doesn’t have adequate funds to acquire the debt-ridden private lender. In fact, Kotak Mahindra Bank is the ideal candidate to takeover YES Bank, he added at an event. “We are in the business of taking risks, but we should price them correctly. The difference between the private sector banks and public sector banks lies in pricing this risk,” Rajnish Kumar also said at India Economic Conclave on Monday. It comes days after Prashant Kumar, CFO, SBI told CNBC TV18 denied reports that the SBI may be asked to acquire YES Bank or any other weak private sector bank. Shares of SBI were trading at Rs 334.20, up 2.35 points, 0.71% on NSE.

The debt-struck YES Bank is struggling with liquidity issues and is seeking to raise $2 billion by issuing fresh equity and weighing a number of offers. In case the private lender is unable to raise the required capital in another six months, it may turn out to be a risk to the financial system, analysts at Macquarie Capital Securities recently said.

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Meanwhile, SBI recorded a decline in gross slippages and a nearly six-fold jump in its consolidated net profit in the second quarter of the ongoing fiscal. The profit surged on the back of a one-time gain on the sale of a partial stake in SBI Life, while asset quality also improved. The net consolidated profit jumped Rs 3,375.40 crore for the quarter under review, SBI said in a regulatory filing. Net Interest Income (NII) of the lender increased to Rs 24,600 crore in Q2FY20 from Rs 20,906 crore in Q2FY19, an increase of 17.67 per cent. The net profit was Rs 576.46 crore in the July-September quarter.