Yes Bank to expand retail business

Private-sector lender Yes Bank is working on a plan to re-balance its business model by broad-basing the portfolio towards retail banking, its Group President and Country Head Amit Kumar has said.

Yes Bank, which has taken its balance sheet size to over Rs 1,00,000 crore, depends on large corporates for 66 % of its business.

About 15 % of its portfolio comprises the mid-segment and 17 % belongs to small and medium enterprises (SMEs).

"Over a period of time, we are getting equally focused on SMEs and retail banking directionally. We want to see our business portfolio coming 33 % each from large corporates, mid-segments and SMEs," Kumar said on the sidelines of the India Engineering Sourcing Show (IESS) here.

The bank also wants to re-balance its resources of deposits.

The bank gets about 20 % of its deposits from the Current Account Savings Account (CASA).

Kumar said: "We want to take CASA from 20 % to 35-40 % in the next 12-18 months."

CASA is considered to be the most cost effective source of bank deposits since the rate of interest paid on CASA remains around 6 % against over 8 % in time deposits.

Some of the well-run peers of Yes Bank have CASA up to 40 % and the Rana Kapoor-led bank would also like to tap this channel.

Kumar said even though the CASA rates remain around 6 %, "for me, it is still cheaper replacing wholesale funding which costs between 8.5-9 %."

For its deposits mobilisation, Yes Bank has also tapped cost effective foreign currency resources. In all, the bank has managed to raise $ 400 million in different tranches of the swap window recently provided by the Reserve Bank.

It has also raised $ 105 million from the International Finance Corporation for lending to SMEs, Kumar said.

He said most of the SMEs which are being serviced by Yes Bank are in any case part of the value chain along with the large corporate clients of the bank. "They are the distributors/suppliers of our large corporate clients."

Some of the 'sunrise' sectors for the bank include life-sciences, information technology, pharmaceutical, FMCG and parts of engineering.

"These sectors have remained relatively insulated from the stress that is seen in the banking sector," Kumar said.

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