There have been rumours about your bank being in the race to acquire the Indian retail assets of an international bank
We would be receptive to such a development. Due to reasons of confidentiality we cant really expand on this point further. If there is a sale, we would want to put our best foot forward. Its a strategic decision and will help augment our retail portfolio and acquire some people who we believe would be a very good cultural fit.
How are you planning to go about expanding your retail lending business
As our branch network expands, the objective is to offer retail products from most of our retail branches since we want to maximise our share of our customers wallets by catering to all the needs of our retail customers. Given our lifecycle experience on retail assets, we are additionally focused on serving our liability customers, thus, mitigating risk in this business.. So, we are offering retail lending products to most of our customers on a relationship basis in top 125 - 150 branches.
The third quarter is usually considered to be good for the banks, owing to festive season demand kicking in. How has it been for you
Yes Bank has delivered a net profit at R342.2 crore highest ever in the history of the bank driven by strong growth in net interest income (NII). Net interest margins (NIMs) grew by 10 basis points to 3% on the back of continued acceleration in savings accounts which grew at 307.8%, resulting in a satisfactory current account savings account (Casa) ratio at 18.3%.
Are you planning to continue with 7% interest on savings accounts As consumer account base grows, dont you think this will hurt your margins
Increasing saving accounts along with Casa ratio to 30% is a key objective. The savings account deregulation has been an important driver to attract customers to the bank, with customer acquisition increasing six times since deregulation. Savings accounts also come with significant cross-sell opportunities compared with term deposits, as there is higher engagement with savings account holders. These accounts are sticky and a substitute for term deposits rates, which are currently in 8.5-9.25% range. We do not intend to drop the market leadership rate of 7% in the near term. The NIM is improving as a consequence of a growing Casa base. We expect our Casa ratio to improve by 1-1.25% every quarter. We understand that if we get to a Casa ratio of 30% in the next two to three years, our NIMs will improve to 3.5-3.6%.
Reports suggest bank may acquire a broking firm
We recently received an approval from RBI to set up a retail broking business. We are in the process building an organic business, primarily to complement our savings account offering to our retail customers. We will largely depend on the powerful ongoing retail customer acquisition of the bank to leverage our broking business.