YES Bank recalibrating retail loans to increase profitability, says CEO Prashant Kumar

Yes Bank

YES Bank’s Managing Director and Chief Executive Officer, Prashant Kumar, stated on January 25 that the bank is recalibrating its retail loan strategy to focus on more profit-oriented products.

“The recalibration is not only in terms of increasing the proportion of the sourcing from the bank. The one part is in terms of how we need to keep away from the products which are not resulting into the profitability,” Kumar said during the post-earnings conference call.

He added that the bank has tightened its underwriting standards, risk metrics, and strengthened its collections in areas where the industry is facing higher delinquencies.

Currently, the bank sources 50 percent of its business internally.

Kumar further explained that the bank has recalibrated its distribution strategy and is now focusing on products that are more ROA accretive. The bank plans to increase its emphasis on affordable home loans, used cars, used commercial vehicles, construction equipment, and micro-laps.

The management also guided that it would reduce its exposure to products such as prime mortgages and new car financing, as these are not high ROA yielding. When asked about the bank’s plans in the microfinance sector, particularly regarding inorganic acquisitions it had pursued in the past two years, Kumar affirmed that there is merit in the business and that the bank will revisit it when the time is right.

Earlier today, the bank reported a net profit of Rs 612.3 crore for the third quarter of fiscal year 2025, a 168 percent increase from Rs 231.6 crore in the same quarter last year. The lender’s net interest income rose by 10.2 percent to Rs 2,223 crore, up from Rs 1,971 crore last year.

Net Interest Margins (NIMs) stood at 2.4 percent, unchanged both on a year-on-year and quarter-on-quarter basis, according to the bank’s press release.