Yes Bank is set to join a list of suitors that are looking at a potential bid for the Indian retail assets of Citibank. It will be a part of the panel of investors looking to take a slice from local operations of the foreign bank that is set to exit 13 countries partially.
Citibank India has 12 lakh bank accounts in addition to 22 lakh credit card accounts. It serves 29 lakh retail customers and is spread across 35 branches. It has a market share of 6% of the overall retail credit card spending in India. Yes Bank has a credit card expenditure of INR 2,288 crore as of March 31 from 9,47,000, cardholders.
Over the last year, many efforts have been made to rebuild the bank in the times of Covid. The bank has reported a 60% growth in corporate term deposits, 33% growth in retail, and 50% growth in current accounts and savings accounts in FY 2020-21. The bank is expecting 15% credit growth in 2021-22.
However, the bank has 15% of the total loan share registered as Non-Performing Assets (NPA). This puts the bank’s asset quality under pressure bank’s asset quality continues to be under pressure. The bank’s plan to set up an asset reconstruction company to clean up the soured loans was rejected by the Reserve Bank Of India. Nevertheless, the bank can survive the Covid wave given that it has a buffer stock, with a coverage ratio of 78.6%. The bank has a strong footing in terms of capital with a capital adequacy ratio of 17.5% as of March 2021.
Categories: Corporate M&A