Yes Bank aims high

AHMEDABAD: The latest entrant in the banking sector, Yes Bank, is targeting a balance sheet size of Rs 4,500 crore and a branch network of 30 spread over 20 cities in 2005-06, the first full year of operations for the bank. "In FY06, the bank plans to disburse loans worth Rs 3000 crore and another Rs 1500 crore odd will go into funding statutory requirements like SLR and CRR," said Rana Kapoor, managing director and CEO of Yes Bank Ltd.
The bank is hoping to raise deposits worth Rs 2500 crore in FY06, out of which 40-45 per cent will come from retail customers. Kapoor said that for the retail segment the bank is likely to keep the mini-mum balance for savings account between Rs 5000 to Rs 10,000. "We plan to focus on customers to whom we can cross-sell various prod-ucts like insurance, mutual funds and other retail loans," he added.
The bank will invest around Rs 20 crore in FY06 to set up the 30 branches. It has already got licences for 16 branches from the Reserve Bank of India and it expects to get 14 more soon.
Kapoor said that they will consider acquisitions once their net-worth is raised to an adequate level. The current share capital of Rs 200 crore will be raised to Rs 500 crore through an initial public issue in the next 3-4 months. Another Rs 200 crore will be raised through issue of bonds, which would take the networth of the bank to Rs 750 crore next year.
He was very bullish about the potential for bancassurance, that is marketing of insurance by banks. "By 2010, 40% of life insurance is projected to be sold through the bancassurance route. This would generate first premium income of about Rs 4000 crore, out of which 30-40% would come to banks by way of commission," explained Ka-poor. Yes Bank will market the policies of Max New York Life Insur-ance and it is not planning more tie-ups in this area.
The bank has developed domain expertise in its focus sectors like food and agriculture, life science and healthcare, retail, textiles and gems & jewellery. It will also give a thrust to wealth management and private banking services.