YES Bank seeks niche in Indian mkt
KUALA LUMPUR: India’s yo-ungest bank, YES Bank Ltd, has big ambitions for an upstart in a country already stuffed with 100 banks and 46,000 branches: it wants to open 100 branches of its own within four years.
Since YES Bank opened in September, it has tried to outmaneuver its larger competitors by becoming a low-cost, nimble provider of mutual funds and insurance products — a niche that has had compounded revenue growth of about 30 percent over the last two years.
“Our thrust area is on the third party distribution, which is mutual funds and bancassurance,” YES Bank’s chief operating officer B. Chandramouli told Reuters in an interview on Thursday.
“The revenue that we will derive out of this in the short run will be far higher than the revenues that we will be deriving from our savings accounts and current accounts,” said Chandramouli, who was in Malaysia for a banking conference.
YES Bank targets the wealthy and the fast-growing “mass affluent”, those with household incomes averaging nearly $15,000 a year.
That sector is growing as India’s economy churns. Asia’s fourth-largest economy is forecast to expand about 7 percent in the current fiscal year, making it the fastest growing major economy after China.
“Every month we are expecting to acquire at least 1,000 customers per branch. So any new branch will have about 12,000 customers by end of one year, so that’s the target,” Chandramouli said.
The bank is also aiming to cut costs by a fifth with its move to outsource its entire information technology requirements to Wipro Ltd., India’s No. 3 software service exporter. Bankers Ashok Kapur and Rana Kapoor hold 52 percent of YES Bank, while 20 percent is held by Netherlands-based Rabobank.
Three private equity investors, New York-based CVC-Citigroup, Hong Kong-based AIF Capital and San Francisco-based ChrysCapital collectively own 25 percent. The remaining 3 percent is held by YES Bank’s top management. reuters