India’s Most Valuable CEOs: The Man With A Mission

Setting his sights on attaining the top-quartile status among banks in the country is Yes Bank’s Founder and CEO, Rana Kapoor. Over the years, the bank has climbed to India’s fifth-largest (private bank) through a keen focus on corporate and SMEs.

For its next phase of growth, it is now turning its attention to retail. Kapoor has been steadily building and scaling up various businesses of the bank, at the same time, with a hawk-eye on non-performing assets. In the past several years, non-performing assets have been in low single digits with net NPAs currently standing at 0.29 per cent for the last few quarters when the Indian economy traversed a rough patch. This is one of the lowest in the banking sector, even among private banks.

Kapoor has also been focusing on stable asset growth. Yes Bank’s advances have registered a 27.85 per cent CAGR over the last three years. What further distinguishes the bank is its focused strategy of acquiring and retaining customers. With renewed focus on the retail segment, the bank is now looking at cross-selling its bouquet of products to further widen its customer base.

Having built the assets side largely through corporate loans, Kapoor is now looking at achieving faster growth through the retail business. Corporate loans comprise 67 percent of Yes Bank’s assets. And, come 2020, Kapoor is looking at a more balanced asset book, with retail comprising 45 per cent of advances.

Added to that, Yes Bank has a calibrated approach to opening up branch networks that work on the hub-and-spoke model, where larger branches act as hubs for smaller banks.

This naturally allows the bank to acquire more customers to raise resources that are deployed in its various asset segments.

The bank’s CASA ratio was 33.3 per cent in the latest quarter. Kapoor is looking at further increasing the CASA ratio to over 40 per cent by 2020 keep costs low and improve operating leverage. Yes Bank is also looking at 3 per cent market share by 2020.

Says Rana Kapoor, founder and CEO, Yes Bank: “By 2020, we aspire to create a comprehensive Commercial & Retail Banking Institution while transitioning into a LARGE Bank. Quantitatively, By 2020 we plan to achieve CASA ratio of 40 per cent+, Granular Deposits of 75 per cent+, Retail & Business Banking Advances mix of 45per cent+ and achieve a 3 per cent+ Market Share in the industry. Along with these quantitative targets, we aspire to deepen ‘Mind Share’ which will translate into increasing ‘Market Share’.

“The diversity in portfolio will be initially contributed by well-established and seasoned SME franchise while from 2018 onwards, consumer retail, will generate multiplier effect and will be a key driver of growth for the bank.”

What distinguishes Yes Bank from the competition is its focus on acquiring strong domain knowledge in its field of operations. This enables it to offer solutions that cater exclusively to various segments. For example, the bank has developed strong domain knowledge in technology, renewable energy, media and entertainment, and life sciences. This enables it not to be caught up in any negative developments in industries, but also to identify fresh financial solutions these sectors require.

Going by the way the 13-year-old bank is growing in all its verticals, it may soon achieve the top quartile status.