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Swot Analysis

Your Bank has displayed strong financial health since inception even during the global
financial turmoil in 2008-09 and subsequent weak macro-economic environment reigning in
India over the last three years.
The Capital Adequacy Ratio of the Bank has been well above minimum requirements at all
times reflecting upon the soundness and sustainability of the business over the longer term.
Your Banks had delivered RoA (annualized) at or above 1.5% over last three years and RoE
(annualized) at or above 20% over last six years. Your Bank also has the best asset quality
among private and public sector banks with one of the lowest Net NPA and Gross NPA
ratios. Your Bank continues to maintain cost-to-income ratios below the industry average and
retain high profitability per employee as compared to peers as a result of a continued focus on
productivity enhancement measures and unlocking economies-of-scale over the last couple of
Your Bank has also developed a strong standing in the market mainly due to its differentiated
Knowledge Banking approach. This approach coupled with its prudent corporate lending
strategy and expansion on retail and SME lending helped minimize the overall impact of the
financial crisis. The crisis has also helped the Bank to validate its model and acquire new
corporate clients while other banks remained in ward looking. Your Bank has had a proven
track record to raise capital necessary to sustain the high growth witnessed. It has raised
capital (both equity and other forms of capital) at appropriate times. This ability
to augment capital funds will help capture growth opportunities with the macroeconomic
environment improving in the future. Last but not the least, the Banks performance is
attributable to the finest human capital base built since inception. The numerous HR awards
are a testimony to this fact that the Bank is truly a desired employer to work with. The Bank
has initiated many path breaking and innovative ideas to nurture talent such as the YES
School of Banking and Yes Professional Entrepreneurship Program. Your Bank has been one
of the largest and most-sought after recruiters from business schools in India.
Although your Bank has made significant strides over the last few years, it is still a relatively
small player in the banking space. It has a lower market share as its network of branches is
still relatively smaller and its legacy is little less richer than its peers in both public and
private sector. Being a new bank, brand awareness among retail customers is lower than its
peers who have been in the business for a significantly longer time. However, your Bank
believes that this represents an opportunity for the bank. Your Bank has been expanding its
branch network and ATM base and augmenting its customer base at a rapid pace.
Furthermore, Your Banks rural presence has also been correspondingly lower than the larger
private and public banking players. Consequently your Bank faces challenges in directly
reaching rural farmers. Your Bank has build a specialized group for Agri & Rural Banking
and financial inclusion to create an outreach in this domain.
Although the global economy is still short of full recovery from the 2008 financial crisis,
normalization of monetary policy is now back on agenda for the developed world. This
suggests that recovery is becoming broad-based and investors are now less worried about the
sustainability of debt levels. New dynamics imply higher import demand from regions like
the US, the eurozone and Japan; creating new opportunities for the emerging world. For
India, as exports grow, a push is also expected to come in the form of governmental efforts,
to revive the investment climate, thereby creating new opportunities in the field of trade and
infrastructural financing. In the 12th Five Year Plan period (2012-17), over USD
1 trillion of investments would be required in the infrastructure sector for India to achieve
double digit growth sustainably.
The Indian banking sector continues to experience demographic tailwinds. The large middle
class with increasing incomes and banking needs along with a huge unbanked population
below the age of 25 offers an enormous retail opportunity for banks in
India. Smaller towns and rural India still provide a huge untapped potential for expansion and
there are significant opportunities especially in the small and medium enterprise space.
Further the ability to use technology to profitably deliver banking solutions to masses is an
exciting opportunity. Additionally, the goal of financial inclusion would benefit immensely
from key government initiatives like the UID program to the use of smart cards, mobile-
based payments, mobile-based card transaction facilities and thereby would help develop the
knowledge infrastructure for enhancing reach of the banking sector.
Savings rate deregulation by the RBI has offered your Bank an opportunity to gain significant
savings account market share by offering better rates and services to customers. An
International Branch (subject to regulatory permissions) would significantly augment and
diversify our overall long-term fund raising capabilities. Your Bank has been ranked by
Financial Times among the top-600 banks in the world, and with Moodys credit rating of
Baa3, at par with Indias sovereign rating, both these events help make the Banks
international foray, a logical next step. The Banks entry into new product/segments viz.
retail assets offers significant potential for the Bank to build on its expanding customer base.
The ability to cross sell products to retail customers would enhance the profitability of the
Bank over the long run. Your Bank also has the opportunity to increase brand awareness
through focused and adept marketing campaigns and leverage the growing retail footprint.
While risks have certainly reduced in the recent past, complete regularization is yet to
happen. At a global level, employment in the US remains quite volatile and there are mixed
signals with regards to whether the recovery is robust or not. In Japan, coordinated monetary
and fiscal stimulus have been successful in bringing the economy out of a deflationary zone;
but the recent sales tax hike poses some risks for the domestic demand. In Europe, although
the economy is out of recession, deflationary risks are still been debated on. China is going
through a rebalancing phase, where growth has dipped below its long-term average, though it
still remains one of the fastest growing economies in the world. All these international
challenges do not mean the risk of a double dip recession. However, it is the pace of recovery
that could be lower than anticipated and thus it is important to remain constantly vigilant.
On the domestic front, it is widely anticipated that the rural growth story is losing steam and
as such is likely to offer limited upside to growth in FY 2014-15. Moreover, the possibility of
El Nino continues to pose a risk to rural growth. While we expect average CPI inflation to
decline in FY 2014-15, development of El Nino could add marginal upside risk to food
inflation. In such a scenario, revival of external demand and recovery in the capex cycle
would have to play a key role in driving the economy ahead. Changes in the RBI regulations
requiring banksto set up a higher number of rural branches could result in lower profitability
for banks. Also, the RBI awarding additional licenses could potentially result increasing
competition in the banking industry over the medium to long-term. There may be some
erosion in projected growth due to market captured by new entrants and also due to the
competition among banks in retaining quality staff. Expansion may lead to increase in costs
and overall reduction in operating profit accompanied by some impact on quality of assets
with seasoning of retail assets in the future. Your Bank could also face intense competition
from allied firms in financial services (e.g. broking/investment banking, among others) who
compete for human capital. Further, recent regulatory changes including revised priority
sector norms, adoption of BASEL-III norms could result in lower profitability for the banking
system in general, thereby also impacting your Bank.


Efficient Human capital
Top management very experienced.
High class technology
Client Knowledge database
Advanced risk management systems
Pioneer in usage of internet services
Ability to raise funds easily because of foreign shareholding

Building new client relationships
Expanding the advisory and Customized services offered to clients, investors, and banks
Other competitor like ICICI bank has Primarily targets upper middle class and upper class of
the society. Expanding business to the middle and lower income groups