Shares of Yes Bank rose as much as 5.5% in intraday trade on Tuesday after a media report said that the bank is likely to exit the asset management business amid intensifying competition in the space.
Yes Bank entered into the asset management business in April 2017 with Yes Asset Management, a wholly-owned subsidiary. As on 31 March 2019, the company was managing assets worth Rs 2,000 crore.
The report said that Yes Bank could either sell the business to another asset manager, or wind it up over a period of time. “The business hasn’t been able to expand much,” a person familiar with the matter told Economic Times. “Either Yes Bank has to sell the business, which is too small for some big player to be interested in, or it may have to wind it down over a period of time. It just doesn’t make sense to continue with it, given the priorities,'” the person added.
Yes Bank, however, in its response, denied that it was considering an exit from the asset management business. “Yes Bank’s subsidiaries are core to extending the bank’s product offerings and reach,” a spokesperson was quoted as saying in the report.
According to the report, Yes Bank entered into an investment management agreement with Yes Trustee Ltd to act as the investment manager for any funds to be launched by Yes Mutual Fund. It obtained the Securities and Exchange Board of India’s nod to launch mutual fund operations on 3 July 2018. Yes Mutual Fund launched its first Scheme, Yes Liquid Fund, in January 2019.
Yes Bank is currently undergoing a massive balance sheet clean-up task under new chief executive Ravneet Gill. The bank posted a whopping Rs 1,506 crore net loss for the March quarter as provisions soared over nine times.
At 2:54pm, shares of Yes Bank were trading 3.8% higher at Rs 152.50 apiece on BSE.
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