Private sector lender Yes Bank’s Rs 15,000 crore fundraising will take care of the bank’s capital requirements for the next two years, CEO Prashant Kumar said Monday. In an interview with CNBC-TV18, Kumar said that the capital raised from the follow-on public offering, or FPO, would not be needed for making any additional provision for its legacy book.

“The capital is not for clean up for sure, because we have already cleaned up our book and made a provision up to 74 percent both on loan as well as on the investment side,” Kumar told CNBC-TV18.

The bank said that any legacy concerns on the loan book were already addressed in the past two quarters since the new board took over the troubled bank. “Concerns on corporate governance have been fully taken care of after the reconstruction of the board. Future earnings of the bank will not be impacted due to any existing loan book issues,” the CEO said.

“Rs 15,000 crore will take our CET-1

“Even on a very bad day we are not going to use more than 100 bps from this capital for provisioning requirement, that should leave us with 400 bps of buffer over minimum regulatory requirement,” he added.

The bank clarified earlier Monday that there would be no lock-in for its new investors coming through the FPO, unlike its last round of capital infusion.

Yes Bank’s FPO is priced at Rs 12-13, a steep discount to its current market price. “QIP

The issue opens on July 15 and closes on July 17, with anchor book allocation on July 14.

CNBC-TV18 had earlier reported that Tilden Park and LIC would both come on-board as large investors through the FPO and had already secured the regulator’s nod for taking their stake up to 9.9 percent.

The State Bank of India, which already holds over 48 percent stake in Yes Bank, has also proposed to invest up to Rs 1,760 crore in the FPO, the bank said.

Also read: Yes Bank shares fall over 16% after FPO floor price announcement

First Published:Jul 13, 2020 4:23 PM IST