SAYING YES TO GROWTH

IN AN environment where the private sector is hardly investing, Yes Bank, a largely corporate focused bank, has been judged as the fastest-growing mid-sized bank in the BT-KPMG Best Bank Survey for 2016/17. Industry analysts feel Yes Bank treads where its peers fear to go. “Yes Bank has created a niche for itself in underwriting certain structured transactions where it earns good fee income. Second, it has a strong risk monitoring and credit underwriting team that is able to identify early warning signals and ensure timely action before a portfolio goes sour,”

says Rohan Mandora, banking analyst at Equirus Securities.” The bank, with a balance sheet of over ` 2.15 lakh crore, has been growing at a rapid pace. Loans and advances have been rising at 34 per cent a year and fee income at 35 per cent per year.

Another reason for strong growth is focus on the retail book. The bank has been seeing good demand from MSMEs and for consumer lending. “While private banks have been able to eat into the market share of state-run banks, Yes Bank has been successful in gaining market share among mass-affluent and above categories of retail customers on the liability side which provides an opportunity to cross-sell retail asset products,” says Mandora. It is the secured lending part of the business that has been a key focus area. For instance, it has been able to grow affordable housing loans at a fast clip. The bank feels the vehicle loan book is not risk-accretive since most of the lending is for productive assets (loans for transporters) which are creating business value.

“Our aim is to get the loan mix to 60:40 by 2020, with 40 per cent being the retail book. While we expect robust growth in corporate loans, retail loans will grow faster on the back of increasing digitisation and efficiencies," says Rana Kapoor, Managing Director and CEO, Yes Bank. NPAs have risen but are still under 1 per cent. “Yes Bank’s asset quality continues to be among the top three in the industry, with gross NPAs at 1.72 per cent and net NPAs at 0.93 per cent," says Kapoor.

“While there is a perception among a certain segment of investors that it is a risky bank, Yes Bank is taking judicious transaction-based calls with risk covered and adequately priced in,” says Mandora.

“WHILE WE EXPECT ROBUST GROWTH IN CORPORATE LOANS, RETAIL WILL GROW FASTER DUE TO DIGITISATION AND EFFICIENCIES”

Rana Kapoor

MD & CEO, Yes Bank