Yes Bank plans to achieve CASA ratio of 30% by 2015

Private-sector lender Yes Bank is planning aggressive moves to tackle the competition. The bank is targeting a current account savings account (CASA) ratio of 30% by 2015 and a CASA ratio of 15% by 2012, said Rana Kapoor, founder/managing director and CEO of the bank. As on June 30, 2010, the bank’s CASA ratio stood at 10.5% in the overall deposit mix.

Yes Bank is planning to open 100 more branches by June 2011, which will need a capital investment of Rs75-80 crore, Kapoor said.

“But this does not include investment in human resources,” he said. The bank is planning to recruit over 1,000 people which will take the head count to 4,500 by March 2011. The number of branches currently stands at 153.

The bank is also planning to expand overseas. “We plan to have one overseas branch subject to Reserve Bank of India approvals and the approvals of the overseas regulator,” Kapoor said. It may take 12-18 months to crystallise plans.

“We need one overseas branch mainly for our capital-raising activities as well as offshore lending to some of our clients who are diversified in international markets and also to compliment a fairly nascent NRI banking strategy. It is a compelling business case for us to set up and overseas branch,” Kapoor said.

Yes Bank had narrowed down the location to Bahrain for which the board approvals were granted on Wednesday.

Besides, the bank will look at the United Arab Emirates to have a representative office internationally, Kapoor said.

Yes Bank is planning to raise up to Rs2,000 crore this fiscal going forward towards boosting its capital adequacy ratio. “We have a head room of Rs2,000 crore in Tier-II capital. In the course of this year we will tap most of it,” Kapoor said. Out of this amount, the bank is planning to raise Rs500 crore this quarter.

The bank’s capital adequacy ratio stood at 16.57% as of June-end, of which Tier-I ratio was 10.32%.

Yes Bank recorded a 56.3% growth in net profit for the quarter ended June to Rs156 crore, compared with Rs100 crore in the same quarter of FY10.

The profit was driven by a two-fold increase in credit growth by 107.2% year on year to Rs26,257 crore and steady margins with net interest margins stable at 3.1%, Kapoor said.

During the quarter, deposits grew 97.1% to Rs30,239 crore on a year-on-year basis. During the same period net interest income grew by 67.1% at Rs262 crore. Gross non-performing assets (NPAs) stood at 0.23% of the gross advances compared with 0.48% as at June 30, 2009. Net NPAs were at 0.04% of net advances compared with 0.24% as at June 30, 2009.