Mumbai: Yes Bank is reconsidering some of its diversification plans such as launching an asset reconstruction company and will instead focus strongly on growing its core banking business, its senior official said.
“Some of our planned initiatives like starting an asset reconstruction company, asset management and a broking subsidiary are now no longer on our immediate horizon. The plans have not been scrapped but only been put off for some time,” Yes Bank’s chief financial officer, Rajat Monga, told the agency.
The private sector bank had planned to start an ARC last year in partnership with a foreign bank and three domestic public sector banks. It had to put off the plan following the global economic recession which has severely affected banks in the western world.
“This would perhaps have been an ideal time to start an ARC as NPAs have risen. However, given that we had a foreign partner and that western-world banks have been affected, we have put off our plans for now,” Monga said.
On its brokerage subsidiary, Monga said that it might be launched earlier than its asset management business.
“But this is again in the medium-term. The time is not opportune now,” he said.
“We want to first attain a critical mass in retail banking which will help us in these initiatives,” he said.
The bank harbours plans to massively expand its footprint pan-India.
“We want to double our branch network to twice our present number of 123 in the next two-years and to four to five times the present number in the next five-years,” Monga said.
The bank is optimistic of a healthy growth this fiscal.
“We will grow higher than the industry. We expect a loan growth of 35-40%. Our business pipeline is healthy, corporates are coming back and with the on-coming festival season, we expect a good loan growth,” he said.
The bank has clocked a total revenue and net profit of Rs308.9 crore and Rs100 crore, respectively, in Q1 FY 10.