Yes Bank is positioning itself alongside other banks in navigating rising savings rates by reducing interest rates on its savings accounts, effective April 21, said CEO Prashant Kumar.
Post the company's Q4 FY25 earnings announcement, Prashant Kumar, CEO of the bank, said the decision aimed at boosting profitability was finalised during the Liability Committee Meeting (LCO) held on April 17.
He said, savings accounts with balances up to Rs 10 lakh will now receive 3 percent, while those between Rs 10 lakh and Rs 25 lakh will receive 3.5 percent. Balances between Rs 25 lakh and Rs 50 lakh will earn 4 percent, and accounts exceeding Rs 50 lakh will get 5 percent.
He projected loan growth of 12-15 percent for FY26, depending on macroeconomic conditions, with deposit growth targeted to marginally exceed loans to maintain a credit-to-deposit (CD) ratio of around 85 percent, down from 86 percent.
“We aim for deposit growth to outpace loans to ensure stability,” he said, addressing the increased cost of funds due to higher SA rates.
Dismissing concerns about retail division challenges, Kumar said the bank aims to shift towards high-yield products.
“We are selective, focusing on segments with better yields while strengthening underwriting and collections,” he said.
Retail assets have grown from 36 percent of the portfolio in FY20 to 60 percent today, supported by 170 new branches opened over the past few years.
Despite heavy investments, Kumar said, the cost-to-income ratio improved from 74 percent to 67 percent in Q4 FY25.
“Our goal is a 1 percent ROA, and cost-to-income is a key component,” Kumar noted, declining to comment on specific targets.
Despite an industry-wide adverse credit cycle over the past 18 months, he said he remains confident in retail’s potential, as “without elevated credit costs, retail would have been profitable last year.”
Kumar also further confirmed that the bank’s 13.5 percent Common Equity Tier 1 (CET1) ratio is sufficient for FY26 growth, with no need for additional capital.
Disbursements have been calibrated to prioritize profitability, avoiding low-margin retail and corporate products.
“We’re not pursuing exposures with thin margins or highly competitive pricing,” he said.
The retail portfolio’s return on investment (ROI) dipped 3.5 percent due to a shift from low-yield products like new car loans and prime home loans to higher-yield segments. “This focus on profitable growth allows us to contain credit costs,” Kumar said.
On questioned about the reappointment of Yes Bank's leadership, set for October, he declined to comment, and said, "I think this is something which is a prerogative of the board. I'm not in a position to comment on this in public and would discuss it with the board."
Yes Bank on April 19 reported a 63 percent year-over-year jump in its net profit to Rs 738 crore for Q4 FY25.
Its net interest income, which is the difference between interest earned and interest expended, increased 5.7 percent year-over-year to Rs 2,276 crore.
Its net profit had stood at Rs 452 crore in the corresponding period last year.
Its gross non-performing assets (GNPA) ratio, as percentage of the total advances, slightly improved to 1.6 per cent as of March 31, 2025, compared with 1.7 per cent a year ago.
Its GNPA had stood at 1.6 per cent in the preceding quarter (Q3FY25).
The bank’s net interest margin (NIM) stood at 2.50 percent, up from 2.40 percent a year earlier and in the previous three months.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
