Yes Bank’s Striking Investment in Technology Infrastructure
Yes Bank, a prominent private sector lender, is allocating a substantial sum of Rs 800 crore to Rs 1,000 crore annually to fortify its information technology infrastructure. In an exclusive interview with Moneycontrol, Prashant Kumar, the managing director and CEO, emphasized that IT remains the cornerstone of the bank’s strategy, even during challenging periods.
Ensuring Stability Amidst Challenges
Amidst turbulent times and a significant lack of deposits, Yes Bank focused on stability. The confidence instilled in customers, particularly when the State Bank of India became a major equity holder, played a pivotal role in regaining trust and attracting deposits.
Financial Revival and NPA Management
The bank has made notable progress in financial recovery, with consistent yearly recoveries exceeding Rs 5,000 crore. Furthermore, a strategic transfer of stressed assets to an Asset Reconstruction Company led to a substantial reduction in gross NPAs, currently standing at 1.7 percent.
Deposit Growth and Portfolio Composition
Yes Bank witnessed a remarkable 23 percent deposit growth in FY24, eclipsing industry norms. The deposit mix consists of approximately 65 percent retail and 35 percent wholesale, showcasing a shift towards retail deposits.
Strategic Investor Transition and Future Plans
With State Bank of India holding a significant stake, Yes Bank anticipates the transition to a strategic investor, adhering to regulatory requirements. The bank’s forward-looking approach includes venturing into microfinance and enhancing technological capabilities.
Microfinance Venture and Succession Planning
Despite challenges in acquiring a microfinance institution, Yes Bank remains committed to exploring opportunities in this sector. Succession planning and leadership development are central to the bank’s long-term sustainability and growth.
Technology Focus and Partnerships
Emphasizing the critical role of technology, Yes Bank continues to invest substantially in IT infrastructure annually. Collaborations with entities like Paytm underscore the bank’s commitment to innovation and seamless transaction processing.
Challenges and Opportunities Ahead
While the bank has overcome past hurdles, challenges persist on the income front. Addressing issues such as priority sector lending targets and optimizing investment strategies remain key focus areas for sustainable growth.
Future Prospects and Market Dynamics
Despite market fluctuations impacting stock prices, Yes Bank’s consistent performance and strategic initiatives position it favorably for sustained growth. The bank’s proactive approach to market dynamics and customer needs indicates a promising outlook for the future.