YES Bank Limited(BSE: 532648) is an Indian Bank, engaged in providing a range of banking and financial services.

The Banks business segments include Treasury, Corporate/Wholesale Banking, Retail Banking, Corporate Finance, Transaction Banking and a host of other Banking services. It was founded by Rana Kapoorand his partner (Late) Ashok Kapur, with the duo holding a collective financial stake of 27.16%.[4] YES Bank has received significant national and international recognitions which include Mr. Rana Kapoor, Founder, MD & CEO being recognized as theEntrepreneurial Banker of the Decade (2001-2010)by Bombay Management Association [5], India's No. 1 New Private Sector Bank in the Financial Express-E&Y Best Banks Survey 2010 [6], India's Fastest Growing Bank of the Year at the Bloomberg UTV Financial Leadership Awards 2011 [7]. YES Bank has become the first Indian Bank, and the third one globally in the banking industry to receive certification for its 'Complaints Management System (ISO 10002:2004)' by the British Standard's Institution (BSI) as on August 25, 2010 [8]. The bank was also awarded the ISO 27001:2005 Certification for its 'Information Security Management System' by BSI [9]. In 2010, the bank announced the roll-out of a strategic blueprint, named Version 2.0 of the bank, to further accelerate its business growth in the retail banking space, with the objective to achieve by 2015, a balance sheet size of Rs.1,50,000 crore, deposits of 125,000 crore, advances of 100,000 crore, a pan India network of 750 branches and a human capital base 12,000 by 2015 [10].

Yes Banks Casa growth remains slow

Posted: Tuesday, Oct 25, 2011 at 0000 hrs IST

Tags: Yes Bank | NIM | Casa Growth | NPL

: Yes Banks net profit rose 33% yoy to R240 crore largely due to higher other income driven by higher fees from debt deals. Higher qoq NIMs, stable asset quality and higher fees are key positives while weak Casa growth is negative. Management guided to loan growth picking up to 25% by March 12 from the current 12.5% yoy. Loan growth decelerated to 12.5% yoy. Including credit substitutes, loan growth was much higher at 27% yoy. In Q1FY12, credit growth, including credit substitutes was higher at 34% yoy. This is the first quarter in which growth in credit substitutes was very high. We believe the bank increased the proportion of credit substitutes largely because it lead arranged many debt deals during the quarter where it retained some portion. In addition, there was a distinct preference from corporates to raise money through credit substitutes. The bank has 80bps MTM cushion on corporate bonds. NIMs improved by 10bps qoq to 2.9%. Improvement was driven by higher loan yields and cheap foreign currency borrowings. Yield on loans improved 60bps qoq. Cost of funds increased only 10 bps qoq largely because the bank resorted to cheaper foreign currency borrowings. While there was a sequential growth in NPLs, the base remains low with gross NPLs at a low 0.2%. Slippages too were very low at 0.2%. Non-interest income grew strongly at 63% yoy and 29% qoq

driven by Yes Banks role as a lead arranger / sole arranger of debt for large sized debt deals of large corporates. Growth in Casa remained low at 1.6% qoq. Yes Bank added 50 branches in Q2 and 91 in H1FY12. Low Casa was largely on account of preference for term deposits. Overall deposit growth was subdued at 10% as a large part of the funding was done through borrowings, especially foreign currency debt. We believe Yes Bank adopted a smart strategy of derisking and consolidating the balance sheet and improving market share of debt capital markets to generate higher fees and profit. However, the slow growth in Casa is disappointing. We maintain OP after the price correction.

Yes Bank has surprised by its robust numbers for Q1 of 2011-12

Narendra Nathan, ET Bureau Aug 8, 2011, 02.43am IST

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Tags: Yes Bank| ROE| NIM| CASA

Yes Bank, one of the fastest growing, new generation banks in the country, has surprised once again by its robust numbers for the first quarter of 2011-12. While its net interest income grew by 35% year-onyear, its net profit went up by 38%. Maintaining margins : Despite the loan growth moderating to 26%, Yes Bank maintained its net interest margin (NIM) at 2.8% in this quarter. This is because the management has opted to focus on margin preservation than growth in the current environment of rising interest rates. To offset the increase in funding costs, Yes Bank has resorted to a sharp increase in the base rate and prime lending rate (PLR).

Though this move has resulted in it losing some low yielding corporate accounts (resulting in a contraction of loan disbursement to Rs 33,100 crore compared with Rs 34,400 in the fourth quarter of 2010-11), the tight asset liability management is expected to help Yes Bank maintain its NIM in the coming years. Improving asset quality : The jump in net profit is also due to the improvement in asset quality. The bank's gross NPAs fell by 6% quarter-onquarter and 31% y-o-y due to a strong recovery in a large NPA, helping it to write back some of its earlier NPA provisions in the first quarter. With this, the gross NPA and

net NPA have come down to 0.17% and 0.1%, respectively. This means the impact of asset quality pressure (due to the rising interest rate cycle) will be much less on Yes Bank. Although there are hints that the bank might go in for capital infusion in 2012 to sustain high growth rates, its capital adequacy ratio (CAR) is at an uncomfortable level of 16.2%.

Improving CASA : Since Yes Bank started its operations only in 2004-5, its CASA (current accounts, savings accounts) ratio is very low compared with that for older banks. An aggressive expansion of branch network41 branches in the first quarter, the highest addition in any quarteris one of the steps taken by the management to improve the CASA ratio and these additions are slowly yielding results. For example, its CASA deposits improved to 10.3% in the fourth quarter of 2010-11 and to 10.9% in the first quarter of 2011-12. High productivity : Despite the high branch and employee additions (450 employees in the first quarter of 2011-12), Yes Bank succeeded in reining in its overall cost and improving its productivity. For example, its cost to income ratio has come down from 38.8% in Q1 of 2010-11 to 37.4% in Q1 of 2011-12. Yes Bank can also boast a cost to asset ratio of 1.6%, one of the lowest in the industry. Reasonable valuations : As of now, Yes Bank is quoting at a reasonable valuationat a price to book value ratio of 2.77 and price to earnings ratio of 14.32. Since it is displaying a high growth, asset quality, and CAR, there is no justification for its being quoted at a significant discount of around 25% compared with other new generation private sector banks. Moreover, its return on equity ( ROE) is also improving

year after year, increasing from 13.88% in 2006-7 to 21.14% in 2010-11. Therefore, it is only a matter of time before Yes Bank gets a re-rating from its current low valuations.

Both private sector Yes Bank Ltd and government-owned IDBI Bank Ltd reported hefty rise in profits for the September quarter but the factors contributing to their earnings were different. While Yes Banks net profit rose 33% riding on a 63% jump in non-interest income, IDBI Banks 20% rise in profit was led by a 28% rise in interest income. Yes Banks profit rose to Rs.235 crore from Rs. 176.3 crore last year mainly because the bank earnedRs. 214 crore in fees by offering trade finance, loan syndication and foreign exchange services. The profit was higher than news agency Bloombergs estimate of Rs. 217 crore. The bank took a conscious decision to debunk and deconstruct loans because of heightened uncertainties in some sectors, chief financial officer Rajat Monga said. We decided not to increase exposure in some sectors like telecom, Monga said. Our telecom exposure has fallen from 5% of the book in the quarter ended June to 3% now.

Yes Banks total advances grew by just 12.7% to Rs. 34,194 crore much lower than the 21% growth the banking system has seen year-on-year. Growth in advances in September quarter over June quarter was even lower at just 3.3%, but Monga said it was better than a decline of 4% seen in June versus March. We will catch up on loan growth in the rest of the financial year because companies will need loans to buy inventory because of inflation. There is also a large opportunity to refinance loans from other banks, he said. IDBI Bank said profit rose to Rs. 515.91 crore from Rs. 429.10 crore in the same quarter last year as interest earnings increased to Rs. 5,812 crore from Rs.4,534 crore. The profit beat a Bloomberg estimate of Rs. 414 crore. The banks other income, however, fell to Rs. 479.10 crore from Rs. 535.15 crore. IDBI Banks growth was driven by a 20% rise in advances to Rs. 1.55 trillion from Rs. 1.30 trillion last year. IDBI Banks stock lost 2.06% to close at Rs. 104.8, while Yes Bank shares lost 1.79% to close at Rs. 284.8. The Bombay Stock Exchanges benchmark 30-share Sensex lost 0.87% to close at 16,936.89 points. Yes Banks results were better than his firms expectations of Rs. 6.3 earnings per share (EPS), said Jigar Shah, analyst at Kim Eng Securities Pvt. Ltd. They have delivered Rs. 6.7 EPS which is good and we continue to like the stock. The concerns are for the whole industry and not particular to Yes Bank if growth slows, Shah said. We have a buy rating with a target of Rs.400 on the stock for financial year 2011-12. With only 11% low-cost current and savings account (Casa) deposits, Yes Bank is dependent on highcost wholesale deposits for funding needs. The banks cost of funds increased to 8.5% from 6.5% last year. IDBI Banks Casa, too, is low compared with its public sector peers, but it has risen from 15% to 19%. The banks profit growth was led by its corporate and wholesale banking division, which made a profit of Rs. 642 crore, up from Rs. 427 crore last year. Profit for retail banking, however, dropped 84% to Rs. 20.47 crore fromRs.127.47 crore last year.