Valid concern, Aarti, but Yes Bank seems to be managing these risks proactively.
While retail slippages are a concern, the bank has already recalibrated its retail loan book for profitability. Also, early delinquencies (31-90 days overdue) are stabilizing, which suggests better underwriting practices.
The bank is maintaining a cautious approach by keeping credit costs low (below 50 basis points) while targeting 30 bps. Additionally, recoveries and resolutions have been strong at ₹4,400 crore in 9M FY25, with a target of ₹5,000 crore for the full year.
CASA deposits have improved significantly (350 bps rise in a year), and RIFF deposits (high-cost) have been reduced aggressively. Capital adequacy (Core Equity at 13.3%) remains strong, supporting growth and resilience.
Despite economic concerns, Yes Bank has posted 5 consecutive quarters of net profit expansion and is focused on improving efficiency (cost-to-income ratio) while targeting 1% RoA over the next three years.
Yes, macroeconomic headwinds can impact banks, but Yes Bank is taking strategic steps to mitigate risks rather than blindly expanding.