Hi guys,
The above article is extremely beautifully articulated and would recommend all of you to read it even if you don’t follow this bank. This article beautifully explains the hurdles for yes bank but it also shows the hurdles for small banks as well.
MY INTERPREATION OF THE ABOVE ARTICLE
They have emphasized on the importance of these rating agency. These rating upgrade have a huge impact on overall cost of the bank. Yesbank is almost 4 to 5 levels below the top private banks.
Secondly is CA. Now getting CA is extremely difficult. We need to understand that banks pay 0% interest on CA account. So the private CA space is extremely competitive and private banks have to offer lucrative deals to get CA. Yes bank being dominant in digital transaction space is one of the USP they have when they have to attract private CA.
Now apart from private CA there is government CA. This space is huge. One government CA has the capability to bring 10k to 30k cr. I was speaking to the regional wholesale manager of yes bank and I got to know that government CA have their own set of rules before opening a current account with a private bank. He mentioned one of them is bank being profitable for minimum 2yrs. Now different entitles have different rules. For HDFC bank government CASA is a walk in. Why I am mentioning all this is because once the books gets clean lot of window dressing is going to happen to their financial statement. So the improvement of all these ratios and assuming yes bank being profitable for 2 years places them in a good position in market to get CURRENT ACCOUNT.
Just think in this way before investing in a company you put a basic screener on 6000 companies and there after you go in detail on the 50 companies shortlisted. So after 2023 yesbank will at least qualify most of the basic screener.
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