Yes Bank entering asset management business

India’s fifth-largest private sector lender Yes Bank Ltd is planning to set up an asset management company (AMC), primarily to channel the savings of retail investors in equity and debt capital markets, the bank said in a stock market disclosure.

The board of directors of the bank at its meeting held on January 14, 2015, has approved the proposal to seek approvals from the regulators for setting up an AMC and primary dealership business, it said.

The new business will complement the bank's retail liabilities strategy, strengthen multi-product customer engagement and also allow Yes Bank to leverage its distribution network for customer acquisition. The bank will simplify and integrate manufacturing to distribution of equity and debt investment products for all its customers.

The AMC will also enhance Yes Bank's Securities brokerage business, retail strategy and help in leveraging existing infrastructure to provide the necessary retail thrust, and will allow the bank to build a wealth management proposition for its customers.

Previously, a Mint report citing sources had said that Yes Bank is in talks to buy Deutsche Asset Management to acquire its mutual fund assets worth around Rs 22,500 crore.

For the third quarter ended Dec 31, 2014, Yes Bank's profit increased 30 per cent to Rs 540.3 crore driven by strong net interest income and other income.

The bank has established a distribution network of 600 branches as of December 31, 2014 across metro, urban, semi-urban and rural centres with a pan India distribution presence spreading across all states and union territories of the country.

Founded in 2004, Yes Bank is the fifth-largest private sector bank in India after ICICI Bank, HDFC Bank, Axis Bank and Kotak Mahindra Bank. It was started by Rana Kapoor and his late partner Ashok Kapur along with Rabobank International. Over a period of time the bank has raised several rounds of equity.

Recently, it raised $200 million in unsecured loan from regional development financial institution Asian Development Bank (ADB).

Shares of Yes Bank were trading at Rs 821.20 each, up 3.47 per cent on BSE in a strong Mumbai market on Thursday at 12.46 PM.

(Edited by Joby Puthuparampil Johnson)

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