YES Bank acquires 9.9% stake in JC Flowers ARC

Yes Bank has inked the share purchase agreement (SPA) with JC Flowers Asset Reconstruction Company (ARC), acquiring a 9.9 percent stake in the ARC at Rs 11.43 per share, the private sector lender informed bourses after market hours on November 28.

A subsequent acquisition of additional shareholding of 10 percent is subject to requisite regulatory approvals, the bank said.

On September 20, Yes Bank’s board had approved the sale of stressed loans worth ₹48,000 crore to JC Flowers, after receiving no other challenger bids.

The bank intends to participate as a minority shareholder in the ARC. “This will be an ancillary to the main line of business of the bank”, it said. As of 31 March, 2022, JC Flowers ARC had ₹595 crore in assets under management with annual turnover of ₹19.9 crore.

For the three-month ended 30 September, 2022, Yes Bank’s standalone net profit dropped by 32.2 percent year-on-year to ₹152.8 crore. In the corresponding period of the past fiscal, the private lender’s net profit stood at ₹225.50 crore.

Total income during Q2 FY23, however, was higher at ₹6,394.11 crore as against ₹5,430.30 crore in the same period a year ago. Gross non-performing assets (NPAs or bad loans) came down to 12.89 percent of gross advances as against 14.97 percent in the year-ago period.