First Abu Dhabi Bank denies evaluating any possible offer for a stake in Yes Bank: Report

First Abu Dhabi Bank denied reports that it is evaluating any possible offer for a stake in Yes Bank, Reuters reported. The clarification came after Bloomberg reported that First Abu Dhabi Bank PJSC is interesting in buying a roughly $5 billion stake in Yes Bank. 

The Middle Eastern lender was weighing a bid for as much as a 51 percent stake in Yes Bank, Bloomberg reported on July 10 citing sources. 

The stake sale has also drawn preliminary interest from Japan, including Mitsubishi UFJ Financial Group Inc and Sumitomo Mitsui Financial Group Inc, although it remains unclear how strong their appetite for a deal is and whether they will proceed, the report added. 

Global rating agency Moody’s has affirmed YES Bank’s Ba3 long-term foreign currency and local currency ratings. The agency also changed the outlook to positive from stable. YES Bank’s asset quality has significantly improved and non-performing loan (NPL) ratios have declined, said Moody’s. 

The change in outlook reflects Moody’s expectations that a gradual improvement in YES Bank’s depositor base and lending franchise will help improve its core profitability over the next 12-18 months. The positive outlook takes into account the improvement in the bank’s asset quality and capitalisation over the past 2-3 years. 

State Bank of India has reduced its stake in Yes Bank, which it rescued four years ago from a crisis of bad loans. Despite the reduction, SBI remains the largest shareholder with a 24 per cent stake. The impending end of SBI Chairman Dinesh Khara’s tenure in August could potentially delay any deals involving Yes Bank. A government-appointed panel has recommended Challa Sreenivasulu Setty as his successor. 

The private lender commanded a total market capitalisation of Rs 78,250 crore at the end of trading session on July 10. Shares of YES Bank have surged more than 10 percent in 2024 so far, while the stock is up 45 percent in the last one year.