YES Bank in talks with foreign banks for investment and business relationships

Foreign banks are looking for opportunities for the expansion of their networks in India. After 2009 there are chances for the foreign banks to get more scope in expanding their network in India.

Even the small banks in India are looking for the bigger banks for increasing their retail business in the country. One such private sector YES Bank is in talks with foreign banks, both for strategic investment as well as for business correspondent relationships.

Speaking at a press conference to announce the bank’s fourth quarter results Mr Rajat Monga, Chief Financial Officer, YES Bank informed the reporters large MNC banks are interested in expanding in India and are looking for major minority or near majority stake in Indian banks. Therefore banks such as YES bank will be in a privileged position to talk to foreign banks when the Reserve Bank of India guidelines become favorable.

Mr Monga said by 2009, YES Bank will be in a better position to attract foreign partners, as it will have a bigger network and a larger share of SME and retail business. Mr Monga was talking to reporters at a press conference to announce the bank’s fourth quarter results.

For the quarter ended March 31, 2008 the net profit of the bank was more than doubled to Rs 64 crore from Rs 31 crore in the same period a year ago. The bank also reported a net NPA of 0.09 per cent for the first time and made higher provisions of Rs 22.8 crore as against Rs 12.7 crore.

Mr Rana Kapoor, Chief Executive Officer and Managing Director, said the bank did not have any failure in its marked-to-market (MTM) derivatives exposure. At present the bank is having 130 forex clients across large corporates and mid corporates. Out of the total MTM derivatives exposure, large corporates account for about 70 per cent, while mid-corporates or emerging corporates account for the remaining 30 per cent.

“We do not have a single derivatives exposure to the SME sector. We have filtered our clients very carefully,” Mr Kapoor said.