Growth moderating: Yes bank is aiming a growth of mid 20’s, but notes that
RWA growth could be less than balance sheet growth as share of retail advances
increases. As of now the approach to growth is that of flight to safety and the
bank has sold of some of the loans/credit substitutes. The bank has a bottom up
approach towards opportunities and have not taken a sectoral focus on lending.
Asset Quality‐ Not seeing much stress as of now: The bank is not seeing any
large concerns on asset quality even at 5-6% GDP growth and also the
restructuring pipeline continues to remain slim. The bank pointed out that
delinquency should not exceed 2008 levels but put a caveat that in 2008 the
economic down cycle was very short.
Margins‐ Expected to improve: Yes bank pointed out positive impact on margin
from increasing proportion of CASA, lower cost of wholesale funds as PSU have
cut down on bulk deposits. Also with the rate cycle expected to ease, Yes bank
will be a beneficiary of wholesale rates coming off.
Trade off between growth and Opex efficiency: In spite of slowing growth, Yes
intends to continue to build its branch network to 800 by FY15. Management
believes that ~150-180 branches added over last 1.5 yrs will improve in
efficiency and aid improvement in operating efficiency even as new additions
add to the branch strain. Cost income have moved up to 38% from 35% last yr
and management is comfortable with ~40-42% cot income as they get more
retail both on liabilities and assets.
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