Yes Bank set to expand Gulf presence with DIFC debut

Dubai - India's fifth-largest private sector bank forecasts 250% growth by 2020

Yes Bank, one of the fastest growing Indian private sector banks, hopes to bolster its Gulf presence with the opening of a second overseas representative office at Dubai International Financial Centre (DIFC) as its seeks to relaunch a $1 billion qualified institutional placement (QIP) of shares.
India's fifth largest private sector bank, which has been seeing an annual average growth of 30 per cent, said it is expecting regulatory approvals for the DIFC debut just two years after embarking on its first step towards global expansion by opening a representative office in Abu Dhabi in 2015.
Pralay Mondal, senior group president, retail and business banking of Yes Bank, said the DIFC presence is the next logical phase of its Gulf foray and shows its commitment to growing the bank's footprint in the international banking space in a region that is an important geography for its NRI business.
The bank, which is targeting a balance sheet growth of two-and-a half times or 250 per cent by 2020 - from Rs2 trillion to Rs5 trillion - expects to relaunch its $1 billion fund-raising plan via QIP by June 2017 after it was aborted in September due to "misinterpretation" of guidelines.
As foreign ownership in the bank is at present 42.5 per cent, the lender sees room to increase that to 74 per cent. The bank got approval from its board of directors and the shareholders to raise capital up to $1 billion (Rs67 billion) by "issue of shares or convertible securities" to an extent of 15 per cent dilution. The approval is valid till June 2017.
Mondal, speaking to Khaleej Times during a recent visit to Dubai along with Amresh Acharya, Yes Bank's group president and head of Global Indian Banking, said in tandem with the 250 per cent growth in balance sheet, helped by a strong retail franchise and a bigger number of clients from the small and medium sector, the bank is on track to expand a pan-India footprint with the opening of 1,500 new branches by 2020 to take the total to 2,500 - a two-and-half fold increase.
Mondal said the new phase of expansion would see the lender gradually expanding in south and east India. The bank has so far concentrated on increasing its footprint in the northern and western parts of the country.
Yes Bank, which started operations in 2004, emerged as the largest small bank by 2010, and subsequently, became the largest medium-sector bank.
"We now expect to be one of the largest large-sector banks by 2020, by growing at between 25 and 30 per cent during the next three years to more than double its current market share to about 2.5 per cent. We have been able to build a very good franchise and capital will also not be a problem in the future. With wholesale, retail and business banking performing well, we will continue to see a robust growth even on a larger base," said Mondal.
He also expects the ratio of low-cost current and savings account (CASA) deposit to rise to 45 per cent from 27 per cent.
Acharya said the lender expects to boost NRI business further as it seeks to open rep offices in Singapore and London. "We want to ramp up the share of NRI deposits substantially by 2020 as we see enormous opportunities in these markets."
The bank is also on track to increase the share of retail deposits and CASA to 75 per cent from 54 per cent of its total deposit book.
The bank is seeking to expand its presence in the SME/MSME sector. It plans to add more branches dedicated to this segment which is expected to grow over four-fold by 2020.
- issacjohn@khaleejtimes.com