Yes Bank is open to acquisitions in avenues such as retail assets and retail broking, says Rana Kapoor, MD and CEO. In an interview with FE, Kapoor says the bank plans to continue with the 7% interest rate on savings accounts since it has helped grow the deposit base. Excerpts
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 can’t really expand on this point further. If there is a sale, we would want to put our best foot forward. It’s 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, don’t 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