In an exclusive conversation with Zee Business Managing Editor Anil Singhvi, YES Bank’s Managing Director, and Chief Executive Officer Prashant Kumar says the bank is expecting to recover at least Rs 5000 crore and aiming for the overall loan book growth of 15 per cent by FY22. 

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Speaking about the loss in quarter four, which is mainly due to high Provisions, Kumar says, “We had two options of either doing an aggressive provisioning this year or extending the provisions to next year, we choose the first option with a view to being profitable in the coming quarters of FY22.”  

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After Supreme Court’s verdict on moratorium pleas, the bank had to do interest reversal of around Rs 750 crores and Rs 150 crores interest-on-interest post recognising our standstill non-performing assets (NPA), says the MD and CEO of YES Bank. “Around 79 per cent on loan and 92 per cent on investment provisioning was done.” 

He explains, the bank reported a net loss of Rs 3787 crore in quarter four in the FY21 is due to the aggressive provisioning. The bank, in the same quarter last year, had reported a net loss of Rs 3,668 crore, whereas it has reported a net profit of Rs 148 crore in the December quarter of FY21. 

Except for Provisions, the other internals of bank has been quite strong. In this regard, Kumar says, “The bank’s operating profit has increased by 42 per cent year-on-year basis, registered a growth of 55 per cent in deposits and 23 per cent growth in retail loan, despite being strike by pandemic as first six months of 2020 was a complete washout.” 

On the corporate loan, the MD and CEO mentions that we have strategically reduced the exposure in a specific sector or entity.

“We expect in the retail and micro, small and medium enterprises (MSME) loan book to grow at least 20 per cent. Similarly, the momentum in the corporate has also gradually begun, and expect 10 per cent growth in the corporate loan book too”, YES Bank’s MD and CEO explained further. 

Kumar expects some slippages due to pandemic, however, the bank is aiming to make the recovery of at least Rs 5000 crores this year, which would also meet our credit cost for FY22. 

Kumar sees the impact of the second wave on the bank’s growth but believes, there's a huge difference between this year’s restriction and last year’s lockdown. Once the cases peak, we may see more relaxation in the measures going forward. Moreover, the government’s push on infra and PLI scheme last year is the reason we saw growth in a loan book, added the YES Bank MD and CEO.  

Stating that the bank doesn’t see any negative impact on loan book going forward, Kumar mentions, “The sectors which were supposed to be hit most, due to pandemic, on our loan book, it's already done. The retail and MSME constitutes 51 per cent of our loan book of which the NPA is less than 1 per cent.” 

He also confirms that the bank would definitely explore the CITI Bank asset and book sale option, depending on the commercials.  

Speaking on the fund and capital raising option, Kumar states, “Our CET is around 11 per cent, which is 300 bps higher than regulatory requirements, as our credit cost would meet due to recovery, we doubt the bank will require extra capital, and have sufficient capital to achieve 15 per cent growth.” 

“If there is an environment of growth opportunity, we certainly will explore the capital raising, and since we have all the approvals from the regulatory, we can move fast. Till the time there isn’t a growth opportunity in the environment for over 15 per cent capital raise isn’t needed, he adds. 

Increasing the investors’ confidence, the YES Bank MD and CEO says, “As per our last year’s strategy, we had assured one percent RoA (return on assets) by 2023-end. We are in-line with that strategy where we were supposed to be in FY21, except provisioning, all other internals of bank have performed well so far.”