Mumbai, Oct. 18: Swiss Reinsurance Company (Swiss Re) is picking up a 3.57 per cent stake in Yes Bank, which will make a preferential offer to the reinsurer of up to 1 crore shares at Rs 120 per share, aggregating Rs 120 crore ($26.5 million).

Yes Bank said it would issue fresh shares, with a lock-in of a year, and utilise the proceeds to accelerate its growth initiatives and build on the significant momentum that has been generated across the various businesses since it started operations in August, 2004.

Sources said the bank would use the proceeds to expand the number of branches to 60 from 24 by the end of this fiscal. They were, however, silent on the possibility of a stake hike later by Swiss Re, though they indicated that the companies would explore possibilities of cooperation in various areas.

Yes Bank has also lined up a Tier I and Tier II issue of bonds of over $ 100 million, to be made in this fiscal.

Rana Kapoor, managing director & CEO, Yes Bank, said, “This partnership with a marquee investor like Swiss Re validates our business and financial model in the competitive banking sector and underlines the confidence of long-term value investors in Yes Bank.

“This investment will complement

our expertise in providing knowledge-based products and services to our customers in our unstinted quest to build one of the world’s best quality bank in India,” Kapoor added.

Peter Gujer, executive team member of Swiss Re Asset Management, added, “Swiss Re is very pleased to become a shareholder in Yes Bank through

the proposed preferential allotment. This investment represents an excellent opportunity to build a long-term partnership with a world class management team and a rapidly developing banking platform in India.”

Yes Bank, promoted by Rana Kapoor and Ashok Kapur, also has Rabobank as an investor. It is into corporate and institutional banking, financial markets, investment banking, business and transactional banking and retail and private banking in the country.

Swiss Re, founded in 1863 in Zurich, offers reinsurance products to property, life and health insurers. Following the 3.57 per cent stake acquisition by Swiss Re, the holding of the four major investors in Yes Bank — Rabobank, CVC, Chrys Capital and AIF — will come down.