Yes Bank may be exit from asset management business

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Yes Bank may be exit from asset management business

Mumbai: Yes Bank NSE 4.09 per cent is likely to exit the asset management business which is currently re-developing its strategic roadmap under new CEO Ravneet Gill, since it believes that expanding business could be hard to increase competitiveness, said people familiar with the plans.

Either the bank can sell or wind up the company over some time, said one of the above-mentioned persons.

“The company couldn’t expand a lot,” the person said. “Yes Bank either needs to sell the company too small to interest a major player, or it may need to wind it down for a while.

“The company couldn’t expand a lot,” the person said. “Yes Bank either needs to sell the company too small to interest a major player, or it may need to wind it down for a while.

In order for Yes Mutual Fund to be launched as investment manager, the company entered into an investment management agreement with Yes Trustee Limited The investment manager. On 3 July 2018, it got the Node for mutual fund operations from India’s Securities and Exchange Board (SEBI). In January 2019, Yes Mutual Fund launched its first Yes Liquid Fund scheme.

Risk management systems are immediate concerns for the new management. As the core of Tier I capital drops to 8.4 percent, the bank will look at raising the capital of Rs 7,000 crore. Yes Bank refused to allow an exit from the asset management company. The spokeswoman on the lender said in a mailed response, “the subsidiaries of Yes Bank are central to extending the bank’s product ranges and reach.” Recently, 43 percent of Reliance Nippon Life AMC’s share was sold to foreign developer Nippon Life.

The focus of the new CEO will be to enhance the culture and regulatory standards of compliance in the near term, to medium-term granulated liabilities and digital harnessing and to increase revenue stream stability through asset diversification, in the long run “said the Prabhudas Lilladhar analyst Pritesh Bumb.This means focusing ‘ on wholesale assets – retail / SMEs – and curbing project funding and structured financing exposures. If executed correctly, this strategy should put the bank on the path to improvement.