Yes Bank is expecting a loan development of 15% in the present monetary year (FY22). In an interview with Ankur Mishra, managing director and chief executive officer Prashant Kumar says 15% credit development in FY22 will not be tricky as the bank has disbursed Rs 15,000 crore even in the March quarter. He says present wave of Covid-19 will have some influence, but not to the extent of last year. Excerpts:
What is your assessment on the influence of pandemic? Has the bank carried out any pressure test?
This is as well early. My reading is that financial influence will not be that considerably, compared to what occurred last year. Last year was comprehensive lockdown, anything was closed. It came to nearly zero, but this year there are only restrictions. Lot of activities are taking place. But absolutely there is going to be some influence. Last month, we have seen all-time-higher GST collections of Rs 1.4 lakh crore, industrial production is taking place, movement of goods are taking place. So, as soon as we hit the peak, it will commence coming down. And now we have the vaccine out there. So, financial recovery will come about considerably more quickly.
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How has been collection efficiency in the March quarter (Q4FY21) and in the course of April? Has there been some influence of Covid-19 so far?
We have reached to the pre-Covid levels in the course of the March quarter as far as collection efficiency is concerned. In the March quarter, our collection efficiency remained someplace about 96%. In the initially 15 days of April, we have been at the similar level. We are nevertheless awaiting information immediately after April 15. Overall, I believe there would be some influence, but not considerably.
You have managed your credit deposit (CD) ratio at 102% in Q4 in line with the target to retain it about one hundred%. Now, as the deposits are increasing swiftly, how do you strategy to retain the balance?
On the deposits element, we are constantly minimizing prices. Last one year, we have lowered more than one hundred basis points (bps) on fixed deposits (FDs). On the savings side also, we have lowered prices. Basically, we have to retain balance in deposits development in terms of what are the possibilities for credit. We are searching for a credit development of about 15% for general book. And if credit development is 15%, deposits has to develop more than 15%. But absolutely not at a incredibly higher price. We are not searching to achieve market place share in deposits or stay incredibly aggressive, but it is more in terms of managing our asset liability. So, if we see due to liquidity more deposits would be coming, we will additional lessen our price of interest.
What offers you self-confidence for loan development of 15% in FY22?
I believe that should really not be tricky since even in the last quarter we have disbursed Rs 15,000 crore. It is not reflecting in our quantity as we have made added provisions which lessen your net loan book. Secondly, we have been following a tactic on the corporate side for some of the assets exactly where the concentration was higher. So, that physical exercise is now more than. Going forward, it will be only development. The only caveat is that pandemic should really not bring any unexpected surprise.
NII de-development in the course of the March quarter has been attributed to interest reversals and one-offs. How do you see NII development going forward?
If you do not have that sort of slippage, your NII development will be largely in line with your loan development. So going forward, double-digit development of NII should really be absolutely achievable in FY22.
What is your outlook on net interest margins (NIMs)?
We are expecting to attain at 3% till March quarter in the present monetary year (Q4FY22).
Overall, you have been in a position to do Rs 4,933 crore money recovery in FY21. What is your target for June quarter and FY22, taking into consideration the pandemic?
It is incredibly tricky to guide for June quarter, but absolutely we should really be in a position to attain at least Rs 5,000 crore money recovery in the course of FY22. Why I am saying this is since we have been in a position to obtain a comparable target in six months of FY21 as initially two quarters (Q1FY21 and Q2FY21) have been nearly a washout. And we have been right away recovering from reconstruction and moratorium. The recovery can be more than Rs 5,000 crore in the course of FY22. We can absolutely do greater than FY21.