Private sector lender Yes Bank, which had to be bailed out by State Bank of India and other lenders in March this year, is focusing on reducing its corporate exposure and instead strengthening its offerings on the retail side as part of its turnaround plan.
Yes Bank, which was founded by Rana Kapoor, was put under a moratorium and its board superseded by the Reserve Bank of India in March, after it had struggled to raise much needed funds and seen deposits fall sharply over few quarters. Kapoor was arrested over allegations of money laundering. Prashant Kumar, the chief financial officer of the country’s largest lender SBI, was appointed as the MD and CEO of Yes Bank.
Now under Kumar’s watch, the bank is sharpening its retail focus, while looking to reduce its corporate lending buiness. As part of those plans, Yes Bank plans to double retail and SME (small and medium enterprises) business by 2023 and is also looking to up the share of retail and MSME loans to 60 per cent by that time from currently around 45 per cent of the total loan book.
“There is enough and more potential in retail. The bank has the right equipment to run the right platform and people to run it. We are seeing as a great opportunity to grow. Last four-five years, the bank has built a stable, granular business, where we have good distribution available, we have the industry best platforms and we have the industry best customer touch points. Looking at these strengths, the bank is in a very good position to grow this business much faster,” Rajan Pental, global head – retail banking, Yes Bank, told reporters.
In the last financial year, as worried depositors pulled out their funds, Yes Bank’s deposits fell from Rs 2.09 lakh crore in September 2019 to Rs 1.05 lakh crore at the end of March. Aided by the bank’s bailout and sustained efforts under the new leadership to mobilise deposits, its total deposits have now risen to Rs 1.36 lakh crore at the end of September, up 16 per cent quarter-on-quarter, but still 35 per cent lower than a year ago.
It has set a target of Rs 2 lakh crore in deposits by March 2021, while also hoping to scale up account opening to 1 lakh a month.
“The best numbers for the bank was around 65,000 accounts opened in a month, which we touched last quarter. In October, we touched the figure of 70,000. Our ambition to reach 1 lakh is a combination of both the existing platform as well as digital account opening. We are very hopeful to reach that number by February-March,” said Pental.
The lender has so far received few requests for restructuring retail loans, with the overall restructuring request not more than Rs 200 crore, he added.
Yes Bank on Tuesday unveiled a premium banking programme Yes Premia, which will offer personalised solutions targeting key retail segments like small business owners, salary account holders and senior citizens.
Salaried individuals, for instance, will get complimentary Emerge debit card with benefits worth Rs 50,000, preferential pricing on lockers, two-times loyalty reward points through a loyalty programme among other things. The self-employed can get curated current accounts, automated sweep facility from current to savings account, easy payment solutions for vendors and staff of MSME clients, apart from other benefits. Senior citizens also stand to get various benefits like higher interest rates on fixed deposits and healthcare benefits.
