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Focusing on liability
Presenting at IF, Mr. Rajat Monga (CFO, Yes Bank) highlighted that over
the next five years, strengthening of the liability franchise will be bank’s
biggest focus area. This will be achieved through expansion in branches
as well as launch of new products in the CASA segment. The bank targets
30% Cagr in loans over FY11-15, but growth will be more broad-based
with share of retail and SME lending rising. Bank has been able to sustain
high asset quality standards and as per management, recent trends do
not indicate a material sign of deterioration.
Liability is #1 priority under Version 2 of growth plans
Management highlighted that under the bank’s growth strategy for the next
five years, strengthening of liability franchise will get the highest attention.
Bank plans to improve the share of low cost CASA deposits by expanding
branches and relationships with the corporate and retail clients. In the current
account segment, bank plans to focus on 12 sectors and also scale-up its
market share in transaction banking. In the savings account segment, bank
plans to grow through corporate salary account relationships, focus on high
net worth clients and non-resident Indians. Management believes that the
CASA efficiency of branches is at an inflexion point and a significant
improvement is likely as the branch network reaches 350-400 (as on Jun-11
the branch network was at 255).
Healthy and broad-based asset growth
The bank targets to deliver 30% Cagr in loans over FY11-15 with loan book
reaching Rs1tn. Loan book will get more broad-based with share of branchbanking
loans (SME and retail) rising from current level of 12%, while the
share of large corporate lending is likely to decline from 65%. Fee income will
remain a key component of total income and the bank is focusing to increase
the share of transaction banking fees and higher cross-selling to clients.
Asset quality holding-up
Management highlighted that in spite a strong 54% Cagr in loans over past
three years, its stressed assets are among the lowest (gross NPA at 17bps of
loans and restructured loans of 26bps). Moreover, coverage ratios are also
among the highest. The rise in interest rates and some slowdown in the
economy have not severely impacted the quality of loans. In order to support
growth in lending to SME and retail clients and maintain strong asset quality,
bank plans to make further investment in risk management departments.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Focusing on liability
Presenting at IF, Mr. Rajat Monga (CFO, Yes Bank) highlighted that over
the next five years, strengthening of the liability franchise will be bank’s
biggest focus area. This will be achieved through expansion in branches
as well as launch of new products in the CASA segment. The bank targets
30% Cagr in loans over FY11-15, but growth will be more broad-based
with share of retail and SME lending rising. Bank has been able to sustain
high asset quality standards and as per management, recent trends do
not indicate a material sign of deterioration.
Liability is #1 priority under Version 2 of growth plans
Management highlighted that under the bank’s growth strategy for the next
five years, strengthening of liability franchise will get the highest attention.
Bank plans to improve the share of low cost CASA deposits by expanding
branches and relationships with the corporate and retail clients. In the current
account segment, bank plans to focus on 12 sectors and also scale-up its
market share in transaction banking. In the savings account segment, bank
plans to grow through corporate salary account relationships, focus on high
net worth clients and non-resident Indians. Management believes that the
CASA efficiency of branches is at an inflexion point and a significant
improvement is likely as the branch network reaches 350-400 (as on Jun-11
the branch network was at 255).
Healthy and broad-based asset growth
The bank targets to deliver 30% Cagr in loans over FY11-15 with loan book
reaching Rs1tn. Loan book will get more broad-based with share of branchbanking
loans (SME and retail) rising from current level of 12%, while the
share of large corporate lending is likely to decline from 65%. Fee income will
remain a key component of total income and the bank is focusing to increase
the share of transaction banking fees and higher cross-selling to clients.
Asset quality holding-up
Management highlighted that in spite a strong 54% Cagr in loans over past
three years, its stressed assets are among the lowest (gross NPA at 17bps of
loans and restructured loans of 26bps). Moreover, coverage ratios are also
among the highest. The rise in interest rates and some slowdown in the
economy have not severely impacted the quality of loans. In order to support
growth in lending to SME and retail clients and maintain strong asset quality,
bank plans to make further investment in risk management departments.
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