FY24 will be a year of building capabilities: YES Bank CEO Prashant Kumar

It depends on how you define it. If it comes to taking care of inherited issues, I’d be positive. If the turnaround means the bank is improving its profitability, there are a lot of things that need to be done. Our next phase is mainly about increasing profitability and rewarding our stakeholders.

In the past eight quarters, we’ve seen consistent growth in our business and operating profit. any The observed fluctuations in net profit Attributable only to aging requirements for provisions and occasional mismatches between provisioning requirements and new refunds during the specified quarters.

As a strategic initiative, the bank underwent a major shift in the allocation of its loan portfolio in March 2020. Previously, great emphasis was placed on corporate loans, which were subsequently worked on and changed. Currently, large corporate loans account for 28 percent of our total loan portfolio, while medium sized corporate loans make up approximately 14 – 15 percent. The remainder is owned by Small and Medium Enterprises (SMEs) and Retail Loans. Going forward, we aim to maintain the current structure and expect corporate loan growth to be in line with the growth seen in the retail sector, without declining further.

Second, our deposit base has doubled over the past three years without raising interest rates. The peak spread compared to other banks has decreased from 150 to 50 basis points. Our checking account grew by 30 percent last year, and we aim to expand our checking and savings account segment. We add 1,30,000 new clients to CASA and deposit each month. The bank, after going through a period of turmoil, also faced challenges in achieving priority targets. At present, the resulting drawdown on return on assets (ROA) stands at 35 basis points. Since 2020, we have been successfully fulfilling PSL requirements on a comprehensive basis. The only sub-category where we do not meet the target is that of small and marginal farmers, which is a problem that we are trying to solve both organically and inorganically.

I can confidently affirm that the competency shown by our team in managing corporate loans is exceptional. The only concern in the past stemmed from a centralized decision-making approach, which is no longer the case. In addition, we have maintained a good relationship with the borrowers. Given sufficient capital, liquidity, relationships and skill sets within the Bank, we are poised to continue to grow in a prudent manner. Our approach will be very meticulous and we will not write expensive loans.

Our intention is not to lead a consortium. Instead, we feel fulfilled when we participate as a contributor to the federation process.

We do not currently have asset classes that offer higher returns, including the potential area of ​​affordable housing. It is crucial to establish the required capabilities within the bank before entering into these asset classes. For example, banks that offer car loans tend to focus on used cars because of the higher yields. Similarly, offering personal loans to our clients from existing banks or other salaried individuals offers a better return; A large part of our customer base is the employee category. It is imperative that we first develop the necessary in-house capabilities with our existing client base, to expand our reach to non-bank customers. We also maintain an unwavering commitment to ensuring that quality is never compromised.

actually. We are gradually moving towards asset classes that offer higher returns to enhance profitability. The four factors that can contribute to our earnings are – improving the CASA ratio, venturing into asset classes, reducing the impact on RIDF, and fee income. We can also explore cross-selling opportunities and earn additional fees.

Not at this point. While there has been considerable discourse, not a single example of application of this separation has yet been found.

The question relates to the potential value that any inorganic growth might bring to the bank. If an opportunity arises that has the potential to enhance our value, we will certainly explore it. However, our goal is not about becoming a larger player in the industry.