With SMBC on board, Yes Bank plans faster expansion and stronger profitability: CEO

Yes Bank reported a quarter-on-quarter growth of 4% in advances and a 7% increase in deposits, reflecting renewed optimism under its retail and digital strategy. In an interview with ET Now, CEO Prashant Kumar said the bank’s focus on new customer acquisition and transaction banking capabilities is driving steady improvement in both liability and asset growth.

“Our CASA growth has been more than double our total deposit growth, and we have managed to reduce our deposit costs by 20 basis points,” Kumar said.

While the 7% sequential deposit growth may not be sustainable every quarter, Kumar expects double-digit deposit growth in the coming year.

Lending Growth Outlook: Double-digit growth ahead

Yes Bank is targeting double-digit lending growth in FY25, led by corporate, commercial and select retail segments. Corporate lending has already grown 7% sequentially, and commercial banking continues to grow 16% year-on-year.

“In the next three to four years, Yes Bank will comfortably achieve annual credit growth of 15 to 16%,” Kumar said.

He added that private spending is gaining popularity despite a cautious approach to low-margin products such as new car loans and prime home loans.

SMBC’s share strengthens business synergies and cross-selling

The entry of Sumitomo Mitsui Banking Corporation (SMBC) as a 24.2% shareholder, along with SBI’s 10.8% stake, is expected to accelerate Yes Bank’s execution pace.

“With SMBC’s presence, we can leverage opportunities with large companies, their supply chains and employees for both retail and SMEs,” Kumar explains.

The partnership is also expected to enhance Yes Bank’s capabilities in transaction banking, cash management and credit financing, while opening doors for cross-selling to corporate customers.

Asset quality remains stable despite minor fluctuations

Responding to asset quality concerns, Kumar said the bank’s gross slippages have fallen from 2.4% to 2%, with strong improvements in retail lending performance and minimal new corporate slippages.

“Our credit cost remains stable at 40 basis points,” he said, adding that some quarter-to-quarter fluctuations are due to timing mismatches in recoveries from ARC transactions and provision releases.

The restructured book has been reduced to just ₹200 crore, indicating normalization of legacy stress.

Outlook: Digital focus and cost efficiency to drive growth

Looking ahead, Yes Bank aims to deepen its digital offering, enhance customer experience and maintain focus on profitable, granular growth.

The bank is confident that its strong deposit base, stable asset quality and diversified growth strategy will support recovery momentum and help it achieve mid-teens growth levels over the medium term.