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Proactively de-risking the bank 

February 1, 2016

The Financial Express

Yes Bank on Friday reported a 25.06% rise in its third quarter net profit, supported by a reasonable growth in its net interest income. In the post-earnings press conference, managing director and CEO Rana Kapoor said the credit cost guidance for the fiscal year 2016 has been brought down to 50 basis points. Excerpts:

What is your outlook on credit cost?

Like most other banks, we also had to undergo asset quality review (AQR). Our numbers for this quarter fully reflect the impact of that review as well as our ongoing provisioning. The numbers that we have reported are consolidated numbers and the credit cost for this quarter is 14 basis points. For the future forecast, we are going to maintain our overall credit cost, naturally factoring in the impact of this AQR, at 50 basis points. There will be no spillover whatsoever from any of the special review impact of the Reserve Bank of India in 2016-17.

What helped you bring down your credit cost guidance?

In October 2011, Yes Bank’s risk management department with the relationship leaders took a view that when the GDP slipped below the 6.2% level, there were red flags in the economy. Since then, dynamically the team has been managing our risks systems pro-actively. For four-and-a-half years, we have been de-risking the bank pro-actively. I want to report this that even as a corporate bank, you can build asset quality resilience, you can preserve quality because relationship management with the right risk architecture backing you can also produce results as good as the bellwether bank in the country. Read more

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