YES bank Targets 250 branches by December 2010

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YES bank held its conference call on 23rd April 2009 to discuss on the company’s performance for the quarter and full year ended Mar’09.

Highlights

  • Yes Bank for the quarter ended Mar’09 reported 45% growth in Net interest income at Rs 155.22 crore and 24% growth in Net profit at Rs 80.11 crore.
  • Other income fell by 17% to Rs 89.76 crore due to fall in income from financial markets and financial advisory. Out of the total other income, Rs 33.21 crore constitutes income from financial market, Rs 20.64 crore from advisory business, Rs 25.13 crore from transaction business and Rs 10.78 crore from others.
  • Its Balance sheet grew by 35% to Rs 22901 crore as on 31st Mar’09 from Rs 16982 crore as on 31st Mar’08.
  • Total Advances grew by 32% to Rs 12403 crore from Rs 9430 crore a year ago. Wholesale Banking advances constitute 63.5%, Commercial Banking 29.2%, Business Banking (SME) 6.2% and Retail advances (including Small Business Loans) constitute 1.1% of the Bank’s total Non-PSL advances excluding Priority Sector Lending (PSL) as at Mar 31, 2009.
  • Sector wise break up: 22-25% food and agri, 13% telecom and IT, 16% engineering, 15% infrastructure, 7% life science and 27% others.
  • The bank has no credit cards, debit cards, mortgage and auto loans in its retail books and also has no plans to get into these business in FY10.
  • Total Deposits grew by 21.8% to Rs 16169 crore from Rs 13273 crore a year ago. Current and Savings Account deposits grew by 25.1% while Term Deposits grew by 21.5% y-o-y.
  • The average maturity for advances is around 15-16 months and for liability its 18-19 months.
  • Yield on advances for Q4FY09 stood at 10.41% while for FY09 it was at 12.8% and the cost of funds were at 8.80% for Q4FY09 and 9% for the full year FY09. Moving forward, the cost of funds is expected to go down with the resetting of bulk deposits.
  • The investments increased by 40% to Rs 7117 crore. The yield on investments stood at 9% for the quarter and 8% for FY09. The total SLR books (G sec) stood at Rs 4500 crore and Rs 2400 crore in AAA rated corporate bonds.
  • Borrowings stood at Rs 2100 crore for FY09 well above tier II capital.
  • CASA stands at 8.7% as on Mar’09 with the absolute value at Rs 1400 crore. The CASA has actually shrunk marginally from 9.3% as on Dec’08 to 8.7% in Mar’09.
  • Cost to Income ratio stood at 37.2% for Q4FY09 and 44.2% for the full year ended FY09. The bank is expecting to maintain its cost to income ratio in the range below 46-47% in forthcoming years.
  • Gross NPA as a proportion of Gross Advances stood at 0.68% as at 31 Mar’09. Net NPA as a proportion of Net Advances as at 31 Mar’09 stood at 0.33%. On absolute value the Gross NPA increased by 704% to Rs 84.93 crore and the Net NPA increased by 387% to Rs 41.46 crore during the period.
  • Additions made to gross NPA stood at Rs 40 crore for Q4FY09 and Rs 80 crore for full year FY09.
  • Bank’s total loan loss coverage ratio stood at 144.7% while specific provisioning cover stood at 51.5% as at 31 Mar’09.
  • Net Interest Margin at 3% for Q4FY09 against 3.1% for Q4FY08 and 2.8% for Q3FY09. The NIM for the full year FY09 stood at 2.9% as against 2.7% in FY08.

  • Loans restructured and not classified as NPA is around Rs 70- 80 crore and pending applications is in one account which is worth of Rs 20 crore.
  • It is expected that in next 6 months almost 30-40% of assets will come for reprising.
  • Amongst the highest RoE (20.7%) and RoA (1.52%) in the banking industry during FY09 signifying sustained and profitable revenue growth during a difficult year.
  • Basel-II Tier I Capital at 9.50% and total capital adequacy of 16.63% as at Mar 31, 2009 provides significant headroom for growth. Also the bank is not planning to raise equity for next 12 months.
  • During the fiscal year, Bank mobilized capital funds in excess of Rs. 1000 crore (the highest since inception in the most challenging environment) including Rs. 154 crore of Tier 1 – Perpetual Capital Bonds, the first by any Indian private sector Bank in FY09 and Rs 200 crore of Tier II capital in Sep’09. (Total capital funds of Rs. 3065 crore as at Mar 31, 2009 as against Rs. 2072 crore as at Mar 31, 2008).
  • The bank had 3 legal cases and all the cases have been fully resolved.
  • Book value per share of Rs 54.69 per share compared to Rs 44.60 per share a year ago.
  • The bank has not announced any dividend for the year and has decided to add back the dividend to its capital in order to fund future growth.
  • Yes Bank has 117 operational branches across 92 locations nationally, 93 offsite ATM’s in Mumbai, NCR and Pune along with 2 National Processing Centres at Mumbai and Gurgaon as at Mar 31, 2009. The head count remains at 2671 employees.
  • The bank is planning to open 250 more branches by December 2010 for which it has to apply for licence with RBI. Currently it has 20 un-deployed licences.
  • The bank targets 25-30% growth on advances and deposits for FY10. It plans to grow its CASA by 3-5% every year. With regard to the NIMs, the bank is quite confident that it will see progressive improvement of NIMs from here as it has low share of CASA and almost 91% of its books is still available for reprising.

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