Rescuing Banks in Financial Distress: A Case Study of Yes Bank Using The EAGLES Model

Abstract

Banks play a vital role in economic development. Failure of banks will have a contagion effect on the economy badly, and hence the government is taking all its efforts to prevent bank failure of any sort. One of the new generation private sector banks is Yes Bank, which was started in 2004 and was thought to be doing well until its huge non-performing assets came to light during the financial year 2020. In this paper, the bank’s performance after the restructuring process taken by the State Bank of India has been analyzed to understand the turnaround strategy, using the EAGLES model of performance analysis. It is exploratory research based on secondary data and carried out for a period of ten years, from the financial year 2015 to 2024. The analysis reveals that Yes Bank has made a remarkable recovery in deposits, particularly in CASA and retail deposits, retail lending, and profitability. To sustain this turnaround, the bank has to steer its deposit growth and retail deposits, bring down the CD, concentrate on retail and SME lending, and strategically look at the asset liability management to improve the interest income to interest cost ratio. Additionally, the bank should continue to control operating expenses and improve fee-based income to sustain financial stability.