The six years of legacy created after the reconstruction of Yes Bank in 2020 will be carried forward by Vinay Tonse, who is set to take over as the private lender’s MD and CEO in April. The bank’s current chief Prashant Kumar shared how the bank was brought back from the brink in 2020, his guidance for his successor and the retail segment’s profitability.
What are your next plans after the tenure ends as Yes Bank chief in April?
Change is the only constant. I never plan for the future. If anything comes at a later point, we will see it then. I have completed 42 years as a banker with SBI and Yes Bank. It is a very long time. I would live a happy retired life
What would be your guidance to your successor?
I feel very happy that I am passing on the baton to a very competent person who has vast experience at SBI. And it gives me lot of comfort that the legacy created over last six years will be carried forward. No one should give strategic business guidance to anyone. Every leader needs to have the freedom to chart down the bank’s future trajectory. From a risk-taking perspective, the banking sector has shown that organisations that have patience and don’t take aggressive bets move in the positive direction. Our performance has shown consistent improvement each quarter. And people who take certain aggressive calls, I am not naming any banks, but there are lenders who in the past posted double our profits, but today, they post only 40-50 per cent of our profits. You are dealing with public money and must not take undue, aggressive risk. Also, while managing multiple stakeholders, being honest, transparent and clear is the right way, and with Vinay’s term at SBI, this would never be an issue.
You led Yes Bank after the RBI notified the bank’s reconstruction scheme in 2020. How have things changed since then when depositors were panicking and withdrawing funds en masse?
When I joined six years ago, we declared the results for December quarter in 2019. We reported a loss of over ₹18,000 crore, which I think was the highest loss for any bank. That only shows the size of problem. In the December 2025 quarter, exactly six years since then, the bank showed a profit of almost ₹1,000 crore, which is very near to 1 per cent RoA. At that point of time, deposits stood at around ₹1 lakh crore, now the base stands at ₹3 lakh crore, almost three times growth. Gross NPA ratio at that point was 18 per cent, now it is at 1.5 per cent. Capital adequacy ratio was then less than 1 per cent, now it is around 13 per cent. It was very difficult back then to assess how to resolve such a large problem as there was no particular format. This was the first-of-its-kind experiment, and we have been able to revive the bank as independent entity without merging it with other lender. SBI and other banks that supported us got good investment returns, and as we brought in world’s 10th largest lender SMBC as a major investor, it showed the confidence in franchise that has been created in the last six years.
Retail segment profitability has been a pain point, though…
When we started a new journey after reconstruction, the retail segment was contributing very little to the bank’s overall business and profitability. So, we had to first make substantial investments to build retail book and only then returns follow. As a strategy, we had no choice but to grow retail book as all banks do. We invested in new branches, hiring people and building tech. We were moving in right decision, but in FY24, the entire industry suffered an adverse credit cycle, with higher slippages in unsecured loan segments.
If anyone compares us with a matured bank with more income streams, established large retail businesses, then maybe they won’t see a decline in profitability, but since we were in the phase of building the retail book as this credit cycle came quite early in that phase of investment, that is the only reason why retail wasn’t showing profits. If you exclude credit cost, retail was always profitable for the bank from operating part. Today, retail book has broken even. People can appreciate or criticise things, but if you do it without perspective, then you may arrive at a wrong inference.
