Group 12

Indian banking industry: 77 trillion (US$ 1.27 trillion)

Governed by the Banking Regulation Act of India, (1949) and is closely monitored by the Reserve Bank of India (RBI)

Public sector banks account for 70 per cent of the Indian banking assets

3.5 ATMs and less than seven bank branches per 100,000 people

->Rs 67,000 Crores deposit base 430 branches & over 950 ATMs
-> 47,000 crores loan book -> Rs 1,00,000 crores balance sheet

Indias 4th largest private bank ->Net income of Rs 9,551.43 Crores -> Net profit of 1,300.68 Crores

7,024 employees

 It has adopted B2B2C approach to build retail business. This involves tapping to

the entire value chain of established corporate banking relationships including vendors, dealers and employees.
The CASA ratio has improved from 15.0% in 2011-12 to 18.9% in 2013-13. When

compared with its competitors YES bank still has a long way to go.
A knowledge driven, CRM based approach towards managing relationship

building is a key value driver in corporate banking growth.

The bank has achieved 37.3% growth in net interest income and a 46.7 % growth

in non-interest income in FY 2012-13. Its net interest income is 86.83 % of total income which is good as per industry standards.
It partners with leading industry players to facilitate engagement platform for its

corporate, retail and HNI customers across business issues, sporting platforms and culture, fine arts and luxury. Like deal with IPL & IHL.
The bank has focussed on creating innovative products and service offerings

across the business segments. Some of innovations include IMPS (Immediate Payment Service), M-POS (mobile phone based merchant acquiring service), Money Monitor (Asias first personal finance aggregation tool.

Net Profit (cr) Net Interest Income (cr)

9000 8000 7000 6000 5000 4000 3000 2000 1000 0 45000 40000 35000 30000 25000 Net Profit20000 (cr) 15000 10000 5000 0

Net Interest Income (cr)

Total Assets (cr)

600000 500000 400000 300000 200000 100000 0 Total Assets (cr) 3.5 3 2.5 2 1.5 1 0.5 0

Gross Non Performing Assets (%)

Gross Non Performing Assets (%)

Points of

Yes Bank

AXIS Bank

Kotak Bank

HDFC Bank

Differentiation
Product
Financial Products almost same but if we consider customer service as product then, Yes Bank lags behind HDFC and AXIS bank as it has fewer ATMs as well as branches

Price
Savings Acc FD 6-7% 6-9.85% 4% 3.5-9.75% 5.5-6% 4-9.73% 4% 3.5-9.5%

Min Bal.

5000

10,000

Other charges

Low

Med

Low

High

Place

500 branches + 1050 ATMs

Online, Hoardings

2225 branches and11796 ATMs

TV, online

500+ branches and 1000+ ATMs

TV

3251 Branches + 11,177 ATMs

TV,online

Major Promotion

Rural/SubUrban Presence Strength

Low

Med

Low

High

Cust. Service,Int Rate, Tech, Knowledge bank. Less wide N/W, Low visibility

Wide Network, Tech

Cust Service, Interest rate

Wide N/w Trusted Brand High Cost

Weakness

Bad Image(UTI fraud), High Cost

Less wide N/W, Low visibility

 Treasury/Product Capital Transaction Banking Financial Markets

Corporate Finance
Investment Banking

It includes investments, all financial markets activities undertaken on behalf of the Banks customers, proprietary trading, maintenance of reserve requirements and resource mobilization from other banks and financial institutions. Retail Banking:
In the year 2005, they forayed into retail banking with launch of International Gold and

Silver debit card in partnership with MasterCard International. It includes lending, deposit taking and other services offered to retail customers. Retail Banking is the general branch of banking, targeted at private individuals. Customers are currently being handled by a branch network, composed of over 500 branches across the country with 1050+ ATMs, and Internet Banking facilities. CASA deposits have increased from 7,392.1 Crores in FY 2011-12 to 12,687.5 Crores in FY 2012-13

Corporate / Wholesale Banking: Corporate and Institutional Banking Emerging Corporate Banking Multinational Corporations and Embassies Relationship Management Government Relationship Management International Financial Institutions International Banking Yes Bank deals in corporate investment services. This involves providing, for a fee, financial advice to customers, generally corporate or individual investors. It includes lending, deposit taking and other services offered to corporate customers. Yes Bank achieved 37.3 % growth in net interest income and a 46.7% growth in non-interest income in FY 2012-13.

Other Banking Operations: It Includes para banking activities like third party product distribution, merchant banking etc.

STRENGTHS WEAKNESSES Strong financial performance since inception. Capital Adequacy ratio of bank is well above min requirements RoA at or above 1.5% over last 3 years and RoE at or above 20% over last 5 years One of the lowest net and gross NPA Bank has unlocked the economies of scale High profitability per employee Differentiated standing in knowledge banking approach market through

Still occupies a relatively small space in Indian banking

Network of branches is leading to low market share Brand awareness customers is low among small retail

Rural presence is lower than large banks

One of the finest human capital base

THREATS The recent geopolitical tensions between Iran/North Korea have increased the potential risk of a disruption in global trade Tight monetary policy by the RBI could dampen corporate credit offtake Slowing investments and weak demand conditions and falling GDP RBI regulations requiring banks to set up a higher number of rural branches RBI awarding additional licenses to new banks Regulatory changes like priority sector norms and adoption of BASEL-III norms could result in lower profitability

OPPORTUNITIES Global economic environment has improved Large middle class with increasing incomes and banking needs Huge unbanked population below the age of 25 Ability to use technology to profitably deliver banking solutions Savings rate deregulation by RBI offered an opportunity to gain significant customers by offering higher rates Entry to new product/segment viz, retail assets offers significant potential

Expansion may lead to increase in cost and reduction in operating profit

 .
In the short term, the bank has outlined a detailed five-year roadmap called the Version 2.0 launched in 2010 which is an ambitious journey towards the next phase of growth and is aimed at propelling the Bank to be The Best Quality Bank of The World in India by 2015 with an objective to achieve a branch network of 900, an ATM base of 2,000, 12750 employees, a deposit base of Rs 125,000 crore, advances of Rs 100,000 crore and a balance sheet size of Rs 150,000 by March 2015.

YES Banks vision is to be a benchmark financial institution for sustainability and corporate governance in India as well as globally

In the long run, the bank believes, continuous innovation will be a key driver to its growth. As a part of its strategy to diversify into related financial services business. The bank is looking at setting up broking and asset management businesses as well in the years to come.

SEGMENTATION:

Yes Bank like all other banks segments its customers on the basis of incomes and investment amounts, but it has segregated its services in to the following verticals Corporate and Institutional Banking Companies with turnover more than 7.5 bn Business Banking Companies with turnover between 5bn and 7.5 bn Retail Banking Personal Banking for individuals. It has also managed to carve a niche for itself in areas like cross-border deals and currency strategies, where it has established itself as the market leader.

TARGETING: The bank targets its customers mostly through the segments it has established according to its operational sectors and products, hence for YES Bank, segmenting is almost unanimous with targeting.

POSITIONING: The bank differentiates itself from other players in the industry on the basis of its unique Knowledge Banking Approach emphasizing on technology and human resource. The strategy has been to position itself as a knowledge partner to its corporate clients. The bank has identified certain sunrise sectors within the country that have high growth potential, and aims to provide customized products that cater to the specific needs of each of these industries. The sectors include food and agriculture, health care and life sciences, renewable energy, telecommunications, education and media, and entertainment.
Technology YES Bank was founded with the aim of providing world class customer service

to the customers using the latest technology available in the industry. It has used technology as a strategic tool to differentiate itself. It provides services such as Corporate Internet banking ATMs Mobile Banking Phone Banking It collaborated with I-flex Solution Ltd, uses FLEXCURE universal banking solution software and has entered into the strategic partnership with Gartner inc. to formulate and implement the Bank IT policy.

Corporate Banking

Corporate and Institutional Banking Emerging Corporate Banking Multinational Corporations and Embassies Relationship Management Government Relationship Management International Financial Institutions & Banking
Business Banking Retail Banking Savings account, Salary account, Fixed Deposits Loans, Insurance Wealth Management, Portfolio investment schemes, Tax Solutions etc Cards, Mobile Banking, online banking and more.

Branch Banking
Product Capital

Transaction Banking Financial Markets Corporate Finance Investment Banking

Knowledge Banking
Core Product Deposits, Loans Expected Product Insurance, locker, ATMs etc Augmented Product Discounts, goodies,etc Potential Product New schemes through net banking, mobile banking etc

 The rate of interest is regulated by the RBI and other

charges are controlled by IBA. Yes Bank FD rates vary from 6% to 9.85% depending on the time of deposit and age of depositor. Savings account rate is 7% for balance greater than 1 lakh rupees else 6%. Loans vary from person to person and business to business, depending on risk associated and credit ratings Other charges include: cheque book, Card charges, Other bank ATM Transaction charges etc.

 The services are sold through the branches, ATMs, Credit

card on the go, Online banking ( internet) etc. Yes Bank has 430 branches, and over 950 ATMs

Yes Bank promote its brand through following means: Advertising: Television, , Internet, radio, movies,

theatres Print media: hoardings, newspaper, magazines Publicity: road shows, campus visits, Sponsorship Sales promotion: gifts, discount and commission, incentives, etc. Personal selling: Cross-sale (selling at competitors place), personalized service

PEOPLE Employee motivation programs, 8000 employees. PHYSICAL EVIDENCE Customer friendly physical layout. Website

PROCESS: Standardization Customization Simplicity Customer involvement

 Still occupies a relatively small space in Indian banking Network of branches is small leading to low market share Brand awareness among retail customers is low Rural presence is lower than large banks The banks CASA ratio is 18.9 % which means it is sourcing

funds at a higher interest rate. The bank had been a slow mover towards tapping retail customers. Its nearest competitor Kotak achieved a higher CASA ratio by adding more number of retail customers. The bank relies heavily on short-term borrowings. The banks short-term liabilities exceed its short term assets

 The future of banking is the quality of service. With the

advanced technology and knowledge banking, it can offer more personalized services targeting HNI customers. For example, the Nuance speech platform of YES bank with its speech recognition system eliminated the need of navigating through large IVRS menus. The bank shall start beefing up auto and commercial vehicle loan which has huge demand in the country. It can open more number of branches in the commercial and industrial areas. The bank should take a granular approach to expand in the money market which is already experiencing heavy competition. It can form an alliance with other service providers to offer new products. For example co- branding a credit card with health insurance companies

 The banks lending to large corporate still accounts for 64% of total

lending, but now they are gearing up to increase its customer base through branch banking, targeting more retail, commercial and MSME customers. The following points are therefore important to be considered:

YES bank has to increase its visibility and reach to the retail customers.

YES bank has a license to open 700 plus branches by next year. Since

the branch banking service is very much related with the area coverage, so it should first of all cover all the states with its branch network in next 1-2 years. It can become part of MSME industries conclaves with a competition rewarding best performing emerging companies based on some parameters. Till now the bank has not been advertising much on TV channels. It is an important medium of communication. The bank should advertise about its products and offerings while it is spreading to all parts of the country.

 Since the bank is targeting to add more number of young

working population, so advertising on sports channel, business news channel will be a good option to exercise. The cost of advertising on such channels range from Rs 3000 Rs 4000 for a 10 sec slot. Alternatively bank can also chose the web medium like youtube and facebook where the younger population visibility will be higher. Cost of advertising on 5 TV channels for a 12 month period:
Rate per 10 sec Duration of advertisement Cost per advertisement Frequency in a day (prime time) Total cost for a 12 month period Rs 3000 20 sec Rs 6000 20-25 Rs 5.5 crores

Following is the summary of action program we are planning to use to promote Yes Bank in the year 2014: Jan-Mar 14 : Indian Hockey League: It has signed a multi-year deal with the Hockey India League (HIL) commencing with the 2014 season. Aggressive promotion of retail banking through TVC, banners, prints ads etc in IHL starting from 25 January to 23 Feb. Waive off annual fees on Yes Bank Debit/Credit Card. Promote this in IHL/IPL. April-Jun14 : Indian Premier League: It has entered into a 5 year partnership with the Pepsi Indian Premier League (IPL) 2013 - 2017 as the Official Central Partner (Financial Services Category). Promote their high returns, competitive interest rate on loans. Also due to IPL, Yes Bank will be in limelight, sign deals with companies for managing their salary accounts. Collaborate with restaurants, movie halls etc to give discount on purchases made through Yes Banks Debit/Credit Card. Associate with sites like Zomato/Flipkart etc. and promote themselves on these sites. Jul-Sep14 : Organize a business fair/conference for MSME. SMEs need timely and unrestricted access to financial services. A conference or fair will help in creating a platform to build a brand name for Yes Bank in MSME segment. Conduct a nationwide finance/entrepreneurship competition/workshop in the top B schools. Oct-Dec 14: Conduct the The Yes Bank Indian Masters Polo 2014 Cup. This will help in establishing and maintaining relationships with HNI & corporate. Launch TVCs with traditional touch during Diwali season.

With a comprehensive product suite of Financial Markets, Investment Banking, Corporate Finance, Branch Banking, Business & Transaction Banking and Wealth Management YES Bank has managed to make a mark for itself in the industry in the past decade
.

It has a knowledge driven, CRM based approach towards managing relationships.

The bank has been able to achieve sustained growth in fee income across transaction banking, financial markets, corporate finance, investment banking and retail banking.

Thank You

Group 12