As high bad loans force many private sector lenders to turn cautious on corporate loans and focus on the retail sector, YES Bank said it is interested in all areas of business as its non-performing assets are well under control.
“We don’t have scary non-performing assets (NPAs) like other banks; the capex cycle is starting and credit growth is inching up. We will participate in that. We have the maturity in the business and lower NPAs; we have the capital and can also raise capital if required. So, growth is a given,” said Pralay Mondal, Senior Group President, Retail and Business Banking, YES Bank.
Both gross and net NPAs, as a percentage of gross advances, improved for the bank in the quarter ended March 31, 2018, to 1.28 per cent and 0.64 per cent, respectively.
Mondal attributed the improvement in NPAs to resolutions that have taken place, and said that the general collateral of the bank is also better.
Growth engines
“All three engines of the bank – wholesale, small and medium enterprises, and retail – are doing well for different reasons,” he told BusinessLine .
Mondal said the SME sector is also seeing a revival after demonetisation and the roll-out of GST. “SMEs are also doing well for us. In the first half of last year, the overall systemic growth in SMEs was little slow. But now I see a clearly stronger pick-up and we are leveraging that,” he said.
Outlining plans for 2018-19, Mondal said the lender will continue its focus on retail lending through branches as well as digital initiatives.
“We will focus both on branch and digital expansion. I don’t come from the school of thought where you don’t need branches. You need branches. The question is how to create the complimentary digital channels.” He noted that HNIs, who often provide a significant chunk of retail revenue, still require branches to meet relationship managers or use lockers.
Apart from the focus on digital payments through tie-ups with Samsung Pay and Bharat QR, the bank is also creating efficiencies internally for digitisation.
“But at the end of the day, you can’t force the customers to adopt digital initiatives. Water will find its own level,” he said, noting that people were forced to adopt digital payments during demonetisation due to insufficient cash.
To add branches
The lender currently has 1,100 branches, and it could look at adding about 100 branches more.
It is also hoping to see a significant increase in its credit card business. “For credit cards, less than 100 per cent growth will not be acceptable. We grew retail assets by 100 per cent last year. So, I will be disappointed if we grow less than 50 per cent,” he noted.