• Growth Elements
  • Posts
  • How Yes Bank Turned around from Distressed to a $10 Billion Valuation in under 5 Years

How Yes Bank Turned around from Distressed to a $10 Billion Valuation in under 5 Years

Author

Chintankumar Maisuria
September 09, 2024

In partnership with

Read time: 3 minutes.

Welcome to the 63rd edition of The Growth Elements Newsletter. Every Monday, I write an essay on growth metrics & experiments and business case studies.

Today’s piece is for 5,100+ founders, operators, and leaders from businesses such as Shopify, Google, Sage, Hubspot, Zoho, RateGain, Zaggle, Servcorp, and Apollo.

Happy Monday!

Indian Bank - Yes Bank turned around from distressed to a $10 billion valuation in under 5 years.

𝐁𝐚𝐜𝐤𝐠𝐫𝐨𝐮𝐧𝐝 𝐚𝐧𝐝 𝐂𝐫𝐢𝐬𝐢𝐬

  1. Severe financial distress in early 2020

  2. Piling bad loans/toxic loans

  3. Governance issues

𝐑𝐁𝐈 𝐈𝐧𝐭𝐞𝐫𝐯𝐞𝐧𝐭𝐢𝐨𝐧

  1. RBI’s action to supersede the Bank’s board

  2. Bailout involving SBI bank and other private banks.

  3. Brought in a new management team

𝐋𝐨𝐚𝐧 𝐁𝐨𝐨𝐤 𝐚𝐧𝐝 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐏𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞

  1. As of FY24, total loan book ₹2.28 trillion

  2. Retail + SME advances comprised 61.6%

  3. Mid-corporate advances 15%

  4. Corporate advances 23%

  5. Strategic shift to retail and SME lending

  6. Balanced and less risky loan portfolio

𝐆𝐫𝐨𝐰𝐭𝐡, 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐚𝐧𝐝 𝐕𝐚𝐥𝐮𝐚𝐭𝐢𝐨𝐧

  1. Achieved a significant reduction in losses

  2. Effective cost management budgets

  3. Focus on recovery of bad loans

  4. Bank’s valuation surged to $10 billion

𝐍𝐞𝐰 𝐎𝐰𝐧𝐞𝐫𝐬𝐡𝐢𝐩 𝐚𝐧𝐝 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐜 𝐃𝐢𝐫𝐞𝐜𝐭𝐢𝐨𝐧

  1. RBI granted in-principal approval for the sale of up to 51% stake in Yes Bank

  2. Deviation from the typical promoter-holding limit of 26%

  3. Potential new owners include global financial giants:

  • (a) Sumitomo Mitsui

  • (b) MUFG Group

  • (c) Mizuho Bank

  • (d) First Abu Dhabi Bank

𝐑𝐞𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐢𝐧𝐠 𝐚𝐧𝐝 𝐄𝐱𝐩𝐚𝐧𝐬𝐢𝐨𝐧

  1. Under new ownership, Yes Bank is poised for further Loan book growth

  2. Launching new digital products

  3. Adding innovative cybersecurity

  4. Leveraging fresh capital

  5. Reposition as a customer-centric institution

Hire Ava, the Industry-Leading AI BDR

Ava automates your entire outbound demand generation so you can get leads delivered to your inbox on autopilot. She operates within the Artisan platform, which consolidates every tool you need for outbound:

  • 300M+ High-Quality B2B Prospects

  • Automated Lead Enrichment With 10+ Data Sources Included

  • Full Email Deliverability Management

  • Personalization Waterfall using LinkedIn, Twitter, Web Scraping & More

That's it for today's article! I hope you found this essay insightful.

Wishing you a productive week ahead!

I always appreciate you reading.

Thanks,
Chintankumar Maisuria