Yes Bank to boost retail book with strong focus on internal customers

The bank plans to grow its retail book by 10-12% in FY26, reduce the cost of deposits, and improve asset yields

After consciously de-growing its retail book in FY25 to strengthen technology and distribution capabilities, Yes Bank is planning to resume growth in the segment in FY26 in a more regimented manner, with a strong focus on internal customers.

 

In an interview to Business Standard, Rajan Pental, executive director, Yes Bank, said the bank has set a conservative growth target of 10 – 12 per cent for the current year, aiming to monitor the market closely while continuing to enhance its distribution.

 

Pental said that the bank can grow its retail book by 30 per cent if it desires because the platforms are ready, but they want to do it in a regimented way.

 

“Internal customer focus has to be high. And, this is not about retail assets, it is about a franchise. We want to increase the coverage of our products around the customers we have acquired,” he said, adding that the bank wants certain products to grow faster than others.

 

In FY25, Yes Bank’s retail book de-grew 3.4 per cent year-on-year (Y-o-Y) to ~1.01 trillion, but was up marginally (1.8 per cent) sequentially. However, its small and medium enterprises (SME), mid–corporate, and corporate book grew by 23.6 per cent, 22 per cent, and 11.5 per cent Y-o-Y respectively during this period.

 

The bank is also shifting its focus from low-yielding secured retail products to medium-yielding ones, while ensuring that its high-yielding unsecured retail portfolio does not exceed 25 per cent of the overall retail book as the bank views anything beyond 25 per cent unsecured book to be “risky”. 

 

Since its reconstruction in March 2020, the bank has gradually shifted its focus from “affluent” to “mass affluent” customers and transformed its predominantly corporate-heavy book into one that is now largely retail, including MSME. The bank will look to grow its micro, small and medium enterprises (MSME) book by 20 – 25 per cent this year, as there are no indications of stress in the segment, Pental said.

 

"We will continuously keep on working and see that our cost of deposit becomes low and our yield on the assets go up and the quality remains stable. And our customers whom we have acquired once, we are able to leverage not with one product, but with all the products that he needs and desires. So that is the forward looking clear cut objective with which we are building the bank,” he said.

 

Commenting on whether the bank will get into gold loans, Pental said, “We will definitely do gold loan, but maybe we are little away from testing out that product because of the high cost involved in starting that franchise”.

 

“We are also testing out if (with) products like gold loan or loan against securities, we can use some external partners and if that makes it less cost intensive, then we might experiment at this level”, he added.

 

On credit cards, Pental said, “The bank is acquiring 55,000 – 60,000 credit cards in a month currently. This year (FY26), we would not like to see a growth of more than 10 – 15 per cent Y-o-Y, but our overall book will grow by 18 per cent Y-o-Y”.

 

“We would like to, for both personal loans and credit cards, watch the market movement very closely. We are actually seeing a clear cut trajectory in terms of x-bucket resolutions getting stable. We expect this quarter to be better both on slippages and recovery as well as on upgrades. I think next one or two quarters will clearly tell how the trends are emerging,” Pental further said, adding that he expects H2FY26 to see better growth in unsecured retail for the industry as well for the bank.