Ketaki Gondane 09BS0001061Rachit Sharma 09BS0001742Dr. Mehul Kumar 09BS0000974Nishant Vora 09BS0001462Prakash Krishnamoorthy 09BS0001615Preha Sharma 09BS0001667Pankaj Malhotra 09BS0001532Hrishikesh Rao 09BS0000894

Submitted To: Prof. S.V.BidwaiDate: 7th September, 2010College: IBS MumbaiSubmitted By:

INTRODUCTION

Competitive strategy of late entrant

Differentiation through knowledge

banking

Technologycompetitive advantage

Appreciation of human

resource

Banking system in an

emerging market

CONCLUSION

Objective

COMPETITIVE STRATEGY OF A LATE

ENTRANT

ABOUT YES BANK :YES BANK, India’s new age private sector

Bank, is an outcome of the professional entrepreneurship of its Founder, Rana Kapoor and his highly competent top management team, to establish a high quality, customer centric, service driven, private Indian Bank catering to the “Future Businesses of India”.

YES BANK has fructified into a “full service” commercial Bank

Yes Bank was ranked as the third best bank in India by Businessworld and second among new age private sector banks in the country by Financial Express

Vision: To create a commercially viable financial institution that incorporates sustainable development within core business functions

The Bank has adopted international best practices

KNOWLEDGE DRIVEN APPROACH YES BANK is committed to support the

sustainable growth and development of sunrise sectors in the country, by facilitating overall growth through strategic knowledge initiatives.

BANK has formed a specialized ‘Development and Knowledge Banking Division’

YES BANK has invested in the best IT systems and practices in order to make its technology platform a strategic business tool for building a competitive advantage

YES BANK has been recognized amongst the Top and the Fastest Growing Bank in various Indian Banking League Tables

BACKGROUND NOTEEconomic reforms in early 1990’s –

Narasimham Committee

Many important reforms were undertaken in the banking sector.

Important private sector banks were set up in the wake of the banking reforms

Results of the reform in the banking sector was very impressive. The new generation private banks had revolutionized the sector.

Several technological advancements had taken place.

After the successful completion of the first phase of Narsimham committee , a second narasimhan committee was recommended in the banking sector.

Other banks were also introduced in the banking sector.

STAKEHOLDERS

33%

5%4%4%

4%

3%3%2%1%

1%

30%

10%

Chart TitlePromoters Rabobank HSBC Financial Services Khazanah Nasional American Funds Insurance Series Growth Fund SmallCap World Fund 3.64%R. F . Chandler ( formerly Orient Global) Deutsche securities CommonWealth Equity Fund Stichting Pensioenfunds ABP FOREIGN INVESTOR FDI

Yes bank

•Yes bank, one of the new generation private bank , entered Indian market in late 2004 when the banking sector in india was already overcrowded by no of public bank

•But inspite of late enterent the bank grew up with such a fast pace that it drew the attention of analysist and extend its operations to all over the country

Yes bank

•In dec 2006 the bank rated as third best private bank in India by business world and won many other awards

•Ranked second best private bank in financial express –Ernst & young survey of India’s best for the year 2006

Yes bank

•The yes bank was promoted by Rana kapoor and Ashok Kapur with assistance from robobank

•Kapoor and kapur together own 52.5 % of the initial promoters equity of 20 m

•While the Indian promoters had 39 % stake in the bank , robobank had 20 % stake and FII held 20 %

•The bank went public in june 2005. IPO was over subscribed 30 times

Yes bank segmentation

Yes banko Niche market

•Corporate & institutional banking

EXPOSURES IN DIFFERENT SECTORS

21%

17%

22%13%

19%

8%

Chart Title

INFRASTRUCTURE AND LOGISTICS FOOD AND AGRICULTUREOTHERS TMTENGINEERING HEALTHCARE

Business strategy

THE GROWTH STORY

•In the first two quarters since it began operations in 2004-05 its balance sheet was standing at Rs.1300million.

•This was one of the most successful ventures in India.

•It started its operations with 250 employees and 2 branches.

•YES BANK, India's new age private sector Bank, has embarked on its journey into the next phase of growth, and launched the Bank's VERSION 2.0 - the Take-off.

•Mr. Rana Kapoor, Founder/Managing Director & CEO, along with his top management team announced the roll-out of a strategic blueprint for the Bank, to further accelerate its business growth with the objective to achieve a balance sheet size of INR 150,000 crores, a pan India branch network of 750 with a human capital base 12,000 by 2015.

•The bank’s business size was Rs 800 million in December 2006.

•This was significantly higher than the growth reported by other private sector banks with the same background.

•Now the bank is performing above this level.

Key Balance Sheet Items

2010 2006

Advances 480

Investments 221.9

Shareholder’s Fund 75.6

Deposits 546.1

Borrowings 119.4

Business foot print 816.1

•Initially almost the entire emphasis of the bank was on lending to corporate clients.

•The next focus area being wealth management.

•The bank focus mainly on business banking and SME’s for its growth.

•It forayed into retail banking and by April 2007 it had a base of 25000 customers.

•In december 2006, it was rated the 3rd best bank in India.

•The second best bank among new private sector banks.

Rank TOP 5

1 HDFC bank

2 ICICI bank

3 YES bank

4 Indian Overseas Bank

5 Kotak Mahindra Bank

•Yes Bank has been ranked 7 amongst the top 10 Indian Banks,

•while being ranked 1 on the parameter of GROWTH,

•No. 2 on FINANCIAL STRENGTH

•No. 5 on EFFICIENCY by The Economic Times

AWARDS AND RECOGNITION• YES bank achieved many awards and recognition in this

relatively short time frame.

• The market cap of the bank had grown from Rs. 164.2 million in July,2005 to Rs. 424.3million in February,2007.

• This was indeed great achievement for a bank that had entered the Indian banking scenario so late.

• The bank was awarded the Financial Insights innovation Award for innovation in Business intelligence at the Asian Financial Services Congress

Corporate Dossier, Economic Times (December 2005)

Rana Kapoor, Founder / MD & CEO was ranked amongst the 100 most powerful CEOs in India

Business Today most valuable companies (November 2005)

YES BANK was ranked the 105th most valuable private sector company and the 7th most valuable bank in India

Ernst & Young Entrepreneur Awards '05 (November 2005)

Rana Kapoor, Founder / MD & CEO was adjudged the Start-up Entrepreneur of the Year

Environment Leadership Award from USAID (October 2005)

YES BANK was awarded for contributions made through working in partnerships to improve the environment/quality of life for the people of Asia

Asiamoney Foreign Exchange Poll for India (September 2005)

YES BANK was ranked second in the ‘Best for Currency Strategy’ and ‘Best for Technical Analysis’ categories under the Best Domestic FX providers - Corporate

Business Today technology wired companies (February 2005)

YES BANK was ranked amongst the 20 most technology wired companies

ICRA (Moody's affiliate in India) (October 2004)

A1+ rating for YES BANK’s certificate of deposit programme in the second month of operations (current programme size - INR 12 billion)

New Economy First Annual Banking and Finance Awards 2008 (Dec – Jan 2008)

YES BANK was awarded the “Most Innovative Bank in India” at the New Economy First Annual Banking and Finance Awards 2008 held in London and were announced in the December 2008 issue of the International Magazine, New Economy. YES BANK is the only Indian Bank to have won this award.

Business Today - KPMG BEST BANKS Annual Survey 2008 ( December 2008)

YES BANK ranked No. 1 in the Business Today – KPMG BEST BANKS Annual Survey 2008. Ranked No.1 in 11 parameters amongst it peers with Balance Sheet Size less than INR 24,000 crore

Financial Times/IFC, Washington - Sustainable Banking Awards 2006 (June 2008)

YES BANK won the prestigious Emerging Markets Sustainable Bank of the Year Award at the Financial Times/IFC, Washington Sustainable Banking Awards held in London. YES BANK was the only Indian Bank to have received this accolade out of 182 entries from 129 institutions across 54 countries.

Thomson Reuters (September 30, 2008)

YES BANK ranked No.3 in the All Asian Securitized Bonds League (Ex Japan Ex-Australia) conducted by Thomson Reuters.YES BANK ranked No. 5 in India Rupee Bond League for the period January 1, 2008 to September 30, 2008 conducted by Thomson Reuters.

Key Financial Highlights

• Net Profit after Tax of Rs. 3038.4 million in FY09 compared to Rs. 2000.2 million in FY08 representing an increase of 51.9%

• Net Profit after Tax of Rs. 801.1 million in Q4FY09 compared to Rs. 645.1 million in Q4FY08 representing an increase of 24.2%

• Net interest income (NII) of Rs. 5111.8 million in FY09 compared to Rs. 3305.7 million in FY08 representing an increase of 54.6%; NII of Rs. 1552.2 million in Q4FY09 compared to Rs. 1067.4 million in Q4FY08 representing an increase of 45.4%

• Total Net income (NII plus Non Interest Income) of Rs. 9801.6 million in FY09 compared to Rs. 6912.4 million in FY08 representing an increase of 41.8%; Total Net income of Rs. 2449.8 million in Q4FY09 compared to Rs. 2143.2 million in Q4FY08 representing an increase of 14.3%

• Operating Profit of Rs. 5616.1 million in FY09 compared to Rs. 3500.8 million in FY08 representing an increase of 60.4%;

• Operating Profit of Rs. 1539.4 million in Q4FY09 compared to Rs. 1209.4 million in Q4FY08 representing an increase of 27.3%

• Non-interest income to total income ratio of 47.8% in FY09; 36.6% in Q4FY09

• Cost to Income ratio of 42.7% in FY09; 37.2% in Q4FY09

• Advances at Rs. 124.0 billion as at Mar 31, 2009; growth of 31.5% y-o-y

• Gross yield on advances of 12.8% in FY09; 13.0% in Q4FY09

• Deposits at Rs. 161.7 billion as at Mar 31, 2009; growth of 21.8% y-o-y

• Cost of funds of 9.0% in FY09; 8.8% in Q4FY09

• Net Interest Margin of 2.9% in FY09; 3.0% in Q4FY09

• Gross NPA at 0.68% to Gross Advances as at Mar 31, 2009

• Net NPA at 0.33% to Net Advances as at Mar 31, 2009• Loan loss provisions of Rs. 265.4 million in FY09; total

loan loss provisions of Rs. 791.2 million as at Mar 31, 2009

• Total loan loss coverage ratio of 144.7%; Specific loan loss coverage ratio of 51.5% as at Mar 31, 2009

• Total Capital Funds (Tier I + Tier II) of Rs. 30.67 billion as at Mar 31, 2009

• Basel II Capital Adequacy Ratio of 16.63% at Mar 31, 2009 (Tier I at 9.50%)

• Return on Average Assets of 1.52% in FY09; 1.50% (annualized) in Q4FY09

• Return on Equity of 20.7% in FY09; 20.2% (annualized) in Q4FY09

• Book value per share of Rs. 54.69 as at Mar 31, 2009• Basic EPS of Rs. 10.24 and Diluted EPS of Rs. 10.14

for FY09; Rs. 2.70 and Rs. 2.67 for Q4FY09• Total headcount stands at 2671 as at Mar 31, 2009

•FY09 FY08 Growth% Q4FY09 Q4FY08 Growth %

Key Business Highlights• Well capitalized for upturn: Basel II Tier I capital of 9.50% and

CRAR of 16.63% as at Mar 31, 2009 provide significant headroom for growth. During the fiscal year, Bank mobilized capital funds of Rs. 10.6 billion (the highest since inception in the most challenging environment) including Rs. 1.54 billion of Tier I Perpetual Capital Bonds during Q4FY09 (issue oversubscribe by 105%), the first by any Indian private sector Bank during FY09. Total capital funds stand at Rs. 30.67 billion as at Mar 31, 2009 (Rs. 20.72 billion as at Mar 31, 2008).

• Strong Asset Quality: High quality corporate exposure (80% of the externally rated exposure rated ‘A’ and above) resulted in 13% reduction of total RWA for the bank improving the CRAR to 16.63% under Basel II as against 14.53% under Basel I as at Mar 31, 2009; manageable Gross and Net NPA ratios coupled with prudent provisioning policy (total provisioning cover of 144.7% as at Mar 31, 2009).

•Sustainable NIM in a challenging macro-environment driven by pricing power on Corporate loan book and re-pricing of a relatively higher proportion of interest sensitive liabilities; NIM of 2.9% in FY09 (2.7% in FY08).

•Superior Shareholders’ returns: 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 for the economy.

• Private sector lender Yes Bank Ltd posted a 75% increase in net profit to Rs140 crore in the quarter ended 31 March, buoyed by loan growth and an increase in other income.

• The yield on advances fell to 9.7% from 13% and the cost of funds to 6.3% from 8.8%. The net interest margin widened to 3.2% from 3%.

• Other income, or that generated by activities other than its main business, grew 68.3% to Rs160.10 crore from Rs95.10 crore as transaction banking and the financial advisory businesses grew.

• Transaction banking generated income of Rs43.20 crore, while that from financial advisory work was Rs57.80 crore.

• The financial markets business posted revenue of Rs47.40 crore, and third-party distribution and retail fees stood at Rs11.70 crore for the quarter. Operating profit rose 67.3% to Rs257.60 crore, from Rs153.90 crore.

YES Bank taps SMEs for inclusive growth

• To give a fillip to the small & medium enterprises (SME), YES Bank is allocating about Rs 4,000 crore to this space in the current year. Till the end of March, 2010, the private sector lender had lent around Rs 1,500 crore to smaller firms.

• Till October last year, YES Bank has been disbursing SME loans only from 13 branches. But it has started such operations from 33 locations. By the end of the current year, at least 50 locations would be equipped to disburse SME loans, helping the bank access more customers.

• On the hiring front, the bank’s employee strength for the SME business has risen to 300 people as at the end of March 2010, from 82 people in October 2009. The bank is expected to recruit an additional 100 people in 2010-11.

• The bank unveiled its five-year growth plan christened VERSION 2.0–the Take-off.

• The bank aims to achieve a balance sheet size of Rs 1,50,000 crore, a pan-India branch network of 750 with a human capital base 12,000 by 2015.

FUTURE GROWTH STRATEGY•YES bank is also looking at increasing its

workforce from 3,030 to 4,500 by the end of this fiscal that began on 1 April, he said. Its deposit base rose 65.7% to Rs26,798.60 crore, from Rs16,169.40 crore at the end of March 2009. Current and savings accounts stood at 10.5% of

•At the end of March, the bank’s capital adequacy ratio was 20.61%, while net non-performing loans stood at 0.06% against 0.68% at the end of the previous year. deposits at the end of March 2011.

Yes Bank targets loan growth of 40-45 pct in FY11

• To tap available hybrid capital headroom of 15 bln rupees• Aims to maintain net interest margin of over 3 pct in

FY11• To spend 600-750 mln rupees for branch expansion• Private sector lender Yes Bank is targeting loan growth of

40-45 percent and hopes to maintain net interest margin above 3 percent in 2010/11, a top official said on Tuesday. The bank has headroom to raise hybrid capital of 15 billion rupees in FY11, which can be tapped as and when required.

• The mid-sized lender has a capital adequacy ratio of 20.6 percent and a loan book of 221.93 billion rupees as on March 31.

• It will spend 600-750 million rupees to expand branch network to 250 by June 2011, from 150 now, to establish its retail footprint.

• The bank also plans to raise its headcount to 4,500 in 2010/11, from 3,030 now, as it starts launching consumer loan products following a network expansion.

• Earlier in the day, it posted a 75 percent rise in Jan-March net profit to 1.4 billion rupees on higher lending, mainly to corporate.

• The profit, however, lagged street estimates of 1.45 billion rupees for the quarter.

• Yes Bank's loans in the March quarter rose 78.9 percent, while interest margin was at 3.2 percent on higher disbursements to corporate and trade finance.

• Shares in the bank ended down 2.1 percent at 275.50 rupees in the Mumbai market that was down 0.31 percent.

FINANCIAL ANALYSIS

BANK Last PriceMkt

Capitalization

Net Interest Income

Net Profit Total Assets Estb.

Karur Vysya 587.00 3,195.37 1,757.94 336.03 21,993.49 1916

ING Vysya Bank 349.50 4,195.64 2,232.90 242.22 33,880.24 1930

JK Bank 824.35 3,996.27 3,056.88 512.38 37,693.26 1938

Federal Bank 359.60 6,147.16 3,673.23 464.55 38,850.88 1945

Kotak Mahindra 786.00 27,399.52 3,255.62 561.11 37,436.31 1985

IndusInd Bank 207.40 8,512.83 2,706.99 350.31 35,369.52 1994

Yes Bank 298.25 10,170.93 2,369.71 477.74 36,382.50 2003

YES BANK Quarter STATS

▫Net Profit – 75% of yoy for 4QFY 2010.▫Loans increased by 18.6%▫Deposits increased by 21.6%▫Rs 1034cr raised in Jan,2010 to reduce cost of

funds▫Gross NPA ratio was at 0.3%, Net NPA ratio was at

0.1%▫CAR (Capital Adequacy Ratio) improved to 20.6%

CAR = Tier 1 capital + Tier 2 capital Risk Weighted Assets

TIER 1 CAPITAL -A)Equity Capital, B) Disclosed Reserves = 12.9% = 338TIER 2 CAPITAL -A)Undisclosed Reserves, B)General Loss reserves, C)Subordinate Term Debts = 1815Risk weighted assets = (338+1815)/0.206 = 10451

YES BANK Yearly STATS• NII – Increased from 511 to 779cr

NII = (interest payments on assets) − (interest payments on liabilities)

• Net Profit – Increased from 304 to 492cr• EPS – From Rs10.2 to Rs14.6• P/E – 28.6 to 20.1• Opened 18 branches in last quarter and moved

to 150 branches and plans to open 70 more by 2011

STRATEGIES- DIFFERENTIATIONFocus on niche sectors

Knowledge Banking Approach

Outsourcing Information Technology to focus on core competency

Strategic Partnerships

Human resources as a competitive advantage

Non conventional promotional strategy

Focus on niche sector

Providing specialized services to

sunrise industries

Providing wealth management solutions to

affluent customers

Corporate services like mergers and

acquisitions , financial

restructuring, currency risk management.

Knowledge banking approachA unique method of acquiring customers and retaining them by –Speaking the “language of clients”Providing banking solutions through industry

specialistsSome sectors identified by YES BANK to offer specialized services are-

I. Food and agricultureII. Infrastructure developmentIII.Life sciences and BiotechnologyIV. TelecommunicationsV. Information TechnologyVI.Media and EntertainmentVII.Real estates

Parameters used by YES BANK in choosing the Focus sectors-

Potential to add value in providing banking products

Recognition and appreciation of knowledge as a differentiator

Growth potential of the sector

Opportunities for banking products and competitor activity

India’s competitive position internationally in the sector

Sector Opportuinity Clientele Services

Food and agriculture

Emergence of organized retail

Govt of India,Industry clientele

Publishing knowledge reports, Project implementation

Infrastructure development

Build-Operate-Transfer schemes,Public private partnerships

Govt of India Joint venture agreements, Risk management, Project control

Life science and Biotechnology

Networking, tie ups

Govt of india Strategic and financial advisor

Telecommunications

Govt policy, Consolidation

Telecom industry Specialized services

IT Foreign currency Globe trottiing professionals

Non traditional form of banking services

Media and Entertainment

Content production, content distribution

Media houses Fund raising, direct financing

Strategic Initiatives & Advisory Government (SIG) GroupIt is the government advisory & development research arm within YES BANK.

On Dec 2004Seven year contractTotal installation, operation and maintenance of IT assets of YES BANK would be handled by Wipro Infotech

Outsourcing deal with Wipro InfoTech

CRITICAL AREAS IDENTIFIED ON THE TECH FRONT BY YES BANK

1)High level of efficiency through automation of operations

2)Centralized databases and processing for speedy recovery of data

3)Connectivity with customers and external agencies at various “touch points”.

4)Best systems for integration of front , middle and back offices.

5)Adopting best surveillance and security systems

6)Using real time environment for good disaster recovery process and back up systems

STRATEGIC PARTNERSHIPS

Partnership with Importance

Gartner Inc To formulate and implement the bank’s IT policy

PriceWaterhouseCoopers To facilitate the confirmation of policies and processes with ISO and Six Sigma

i-flex solutions ltd FLEXCUBE- universal banking solution software

Cash Tech Cash management solution provider

Murex Risk management

TECHNOLOGY ADVANTAGEYES BANK now delivers a complete banking

platform comprising-Core bankingIntegrated Treasury & Risk management solutionsInternet banking for Retail and CorporateATMs & Switch

Awards on the Technology front-

a)NASSCOM award for ‘IT Innovation in Emerging India in 2006

b)‘Technology Innovation’ award from AC Nielsen

Human resources

Human resources initiatives

•HR as a strategic asset•HR policy objectives-i. Best employer in the sectorii. Most preferred employeriii. Retaining talented employees• Took several Initiatives in HR strategy• Followed pfm process-aligning individual

goal with that of organization

• Aim-to encourage employess to think innovatively and inculcate professional entreneurship

• 5 % executive ownership clause-first such in the sector

• Key initiatives-a) Yes entrepreneur in Action-program helped the

employees of the bank to take a break from regular work and to focus on a project of his /her interest.

b) Yes-professional entrepreneurship prg(YPEP): -Talent management initiative of the bank. -focused on developing the talent of the employees - objective was to ensure that the bank had best managers in the middle and upper levels of the

management to implement its strategic initiatives.

c) Yes-Retail entrepreneurship program(YREP): -yet another talent management initiative -prg aimed at inculcating the cutting edge skills

in the employees in the latest developments of the sector to meet the bank’s future requirements.

- had the futuristic vision and also expected to give big competitive edge over its competitors.

d) Yes Mentor-another imp. Initiative - involved assigning a senior and dynamis

employee as a mentor to a new employee. - helped the new employee to understand the organisation environment and goals of the organisation and thus better inegration into the organisation.

e) Yes School of Banking- Modelled on the lines of some of the centers of learning promoted by the corporate sector.

-incorporated to create a center of excellence for providing training in banking and other financial services in the country.

-the institute was modelled on the values of yes bank to recruit and nurture the best talent in the banking sector.

f) Yes University and school relations-since the bank recruited meritorious student directly from the university campuses, this program focused on maintaining good relations with the univ./schools.

-this partnership went to the extent of preparing specialized courses for th student meeting its its specific requirements.

-This also focused on reverse contribution to the academia by by giving internship training to the selected students.

•Bank’s Hr strategies won major awards-‘Continuous Innovation in HR Strategy’

award at the Indiatimes Mindscape Employer Branding Awards(2007)

•‘Staffing program’ award at the RASBIC Awards(2006)and

•The ‘organization with most innovative HR Practices’ award at the Global HR Excellence Awards, as part of the Asia Pacific HRM Congress 2007 held in Mumbai.

•YES BANK wins 5 awards at Asia's Best Employer Brand Awards and the CMO Asia Awards for Excellence in Branding and Marketing- held at Sinagapore on Aug. 3, 2010.

•YES BANK was the only Indian private sector bank to receive these awards in the following categories:

•Best HR Strategy in Line with Business•Excellence in HR Through Technology•Continuous Innovation in HR Strategy at Work• Innovation in Recruitment•Award for Brand Excellence (Banking and

Financial Services)

Promotion

Promotion

•Yes Bank also differentiated itself in the way it promoted itself.

•Reliance was not much on advertising but on management led client acquisition for corporate and wealth management clients.

•Also strove to provide a delightful banking experience through the layout of branches and other services(lot of wall effects and flooring).

•Probably the first bank to have a chief marketing officer. A roving ambassador ensures that anyone walking in should get immediate personal attention.

•Also there are investment officers,insurane officers,etc.

•Then there is also the private banking lounge

•Introductory TV ads-bank showed the growth stages of money plant Scindapsus Aureus—Roman word-Aureus -(gold coin)

•The plant,believed to bring wealth and happiness,was used by the bank as a metaphor for ideas getting realized.

•A perennial climber,this Yes Bank Money plant symbolised the bank’s commitment to growth.

•As part of the campaigns,the bank gifted •8000 money plant to its business

clients,instead of sending diaries,calenders or sweets.

•Also planned to launch radio, outdoor and online ad campaigns.

•Also plans to focus on educating the customers on risk issues by organizing open house forums.

Employee Value Proposition

SELECT RESPONSIBLE BANKING INITIATIVES

Malnutrition Matters (MM)YES BANK as Technology Transfer Agent

MM’s VitaGoat employs bicycle-powered grinders and variety of locally available fuels to prepare protein-rich soy products like soy yogurt, tofu, and milk as a lower cost, nutritious alternative to milk

Results:

VitaGoat deployed at Buldana Urban Co-operative Credit Society run residential school since 2007

700 school children fed daily with soy milk/paneer 

Expansion to Rajasthan with the delivery of first VitaGoat to Seva Mandir in Jan 2010

Expected to serve ~300-400 people per day

Seva Mandir employee using VitaGoat to grind

Soybeans

Microfinance Institutions Group (MIG)Multiplier Effect: The Indirect Impact Institutes specific transactions to position microfinance as a new

asset class, appealing to a broad base of investors and lenders, expanding access to capital

FIRST Indian bank to undertake innovations in capital market products for microfinance:o Capital Market Products

Banks have been main source of debt funding for MFIs (term loans)

Term loans are relatively expensive they are illiquid YES BANK arranged first rated bond issuance of an MFI

in the world in the form of Commercial Paper & Non-Convertible Debentures of INR 2000 mn (USD 40 mn)

Potential incremental access to capital for industry of USD 12-14bn annually, impacting 60-70mn clients

Zameen OrganicOvercoming the ‘last mile’

Fair trade supported company owned by Small Farmers’

Organizations

Network of 6,000 small farmers producing organic cotton in the

Vidharbha (Maharashtra) and Adilabad (Andhra Pradesh)

regions

Provides vital processing and marketing linkage between

organic farmers and branding companies

Unique concept of Premium: Farmer Premium and

Community Premium

YES BANK is Zameen’s Sole Banking Partner

Sustainable Investment BankAdvisory to SME, Social & Environment Sectors

Promotes investments, provides advisory

services & facilitates growth capital for

social & environment focused enterprises

Asmitha Microfinance Ltd – raised

USD 10mn for one of top five Indian

MFI serving ~1.16 mn clients,

through private placement of equity

Gradatim IT Ventures - raised USD

3mn growth capital enabling MFI

access to technological interventions

that increase operational efficiencies

and reduce costs

The Growth story

•Grown at a tremendous pace.•First two quarters, balance sheet stranded Rs 1300 million.•One of the most successful ventures.•Started operations with 250 employees and two branches.

Initial Growth

•December,2006 Business size was Rs. 800 million .

•October,2007 operating with 60 branches and 3,263 employees.

•Base of 25,000 customers.•Growth rate significantly higher than

other private sector banks.•Market cap became Rs424.3 million.

Initial Growth Strategy

•Entire focus was on lending to corporate clients.

•Next focus area being wealth management

•Main focus on Business banking and small and medium enterprises.

•Forayed into rental banking by April,2007.

Instruments of Growth•A focused business strategy.•Entrepreneurial leadership.•Highly rated employees•Best in class processes.•Evolutionary Technology.

Top five new Private sector banks in 2006 (Ernst and Young Survey)

NAME FINAL RANK

STRENGHTH&SOUNDNESS

GROWTH

PROFITABILITY

EFFICIENCY

CREDIT QUALITY

ICICI Bank

1 1 3 5 1 2

YES Bank

2 4 1 3 3 1

HDFC Bank

3 3 6 1 4 5

AXIS bank

4 5 5 2 2 6

Kotak Mahindra Bank

5 6 4 4 5 3

Rank on various parameters

•Business world ,December 4,2006:-▫Profitability-6▫Size-32▫Efficiency-1 ▫Valuation-3▫Safety-1▫Growth-1

Top Ten Banks In India(Business World , December 4,2006)1. HDFC Bank2. ICICI Bank3. Yes Bank4. Indian Overseas Bank5. Kotak Mahindra Bank6. Punjab National Bank7. Andhra Bank8. Corporation Bank9. Allahabad Bank10.Axis Bank

Milestones of YES bankMay 2004 RBI license to commence banking business

Dec 2006 Ranked no. 3 in businessworld survey of India's best bank.

Mar 2007 Ranked no. 2 among new private sector banks in financial express survey.

Dec 2007 Won ‘Best CSR practice award 2007’ .

Dec 2007 Won IT People award 2007’.

Jan 2008 60 operational branches across India.

Mar 2008 Ranked no. 3 new private sector bank in financial express-Earnest and Young survey

SWOT ANALYSIS

•STRENGTH▫High quality, customer centric, service

driven private bank catering “future industries of India”

▫Adopted international best practices.▫Strong technology, well capitalized.▫Capital adequacy ratio 16.6%.

•WEAKNESS▫Less wide network.▫Not in every state.▫Less promotional activity.▫Unknown brand.

•OPPORTUNITY▫Very wide market.▫Other activity(insurance, stock broking,

mutual fund).▫Wide scope in rural area.

•THREAT▫Very high competition private bank as well

as public sector.▫Government policy.▫Other better saving options available

(like insurance, mutual fund, real estate, gold)

▫Capital market slowdown.▫Rising rates.

Recent Development

The Growth HistoryGrown at Tremendous pace since its inception

One of the most successful ventures in India: Balance sheet satnding at 1300million in the first two quarters

Started its operation with 250 employees & 2 branches

Advances Investments Shareholder's funds

Deposits Borrowings Business footprint

0

100

200

300

400

500

600

700

800

900

2006(Rs mn)2005(Rs mn)Growth(%)

Key Balance Sheet Items 2006(Rs mn) 2005(Rs mn) Growth(%)Advances 480 191.1 151

Investments 221.9 116.1 91

Shareholder's funds 75.6 55.2 37

Deposits 546.1 177.8 207

Borrowings 119.4 36.3 229

Business footprint 816.1 379.8 115

The Growth Story

Key Balance Sheet Items 2010(in Rs Cr) 2009(in Rs Cr) Growth(%)

Advances 22193.12 12403.09 78.9

Investments 10209.94 7117.02 43.45

Total share capital 339.67 296.98 14.37

Deposits 26798.57 16169.42 65.73

Borrowings 4749.08 2189.1 116.9

Total assets 36382.5 22900.8 58.86

Recent Trend in Growth

• YES BANK has 117 operational branches across 92 cities nationally, 93 offsite ATM’s in Mumbai, NCR and Pune along with 2 National Processing Centers at Mumbai and Gurgaon as at Mar 31, 2009.

• Foreign shareholding at 53% includes pedigree investors like Orient Global, Rabobank, HSBC, Franklin Tempelton among others.

• Senior Management personnel effectively hold 7% while Rabobank as a Financial Investor holds 18.2%.

Say Yes to Agribusiness

•YES Bank, as a bank for future industries of India, through it’s knowledge driven approach, is committed to focus on the Food and Agribusiness sector.

•It has taken several initiatives: from ‘Farm Gate’ to ‘Food Plate’.

•The various initiatives that the Yes Bank has undertaken to transform business and finance of Agribusiness are:

•End to End Advisory on developing India’s First Agri SEZ

•Strategic and Financial Advisors to development of India’s First of it’s kind Agro Parks

•National Consultants to Union Ministry of Agriculture on development of Modern Terminal Markets.

•Advisory to Corporate on Large scale Farming Initiatives towards enhancing Food Security.

•YES Bank's mobile money services

Conclusion

Major Instruments for Growth

Focussed business strategy

Entrepreneurial leadership

Highly rated employees

Best-in-class processes

Evolutionary technology

Reasons for Successful Market Entry

Bank’s competence in terms of using high-end technology

Knowledge banking approach

Emphasis on highly qualified human resources

Catered to niche segment of the market with a differentiated strategy

Yes Bank started its operations buring Retail boom

Achievements In December 2006, the third best bank in India in

Business world’s annual survey

The second best among the new private sector banks in the Financial Express-Ernst & Young Survey of India

Top ten banks in India on the basis of following parameters

ProfitabilityEfficiencySafety SizeValuationGrowth

•Yes Bank adopted the Differentiation strategy to gain Competitive Advantage. It followed the following approaches:

•Knowledge Banking Food & Agribusiness Infrastructure Development Healthcare & Life Sciences Communications & Technology Environment & Renewable Energy Education & Social Infrastructure

•Technology Automation of operations Connectivity- Touch Points Integrated operations Surveillance & Security Disaster recovery and Back Up

•Human Capital•Yes bank took various Initiatives in

Human Resources Management:Retaining talented employeesInculcating innovating thinkingEncouraging professional

entrepreneurship

Looking Ahead

•Contemplating to offer stake in Yes Bank to a foreign Player, if any, to tap foreign Markets

•Bank is seriously considering to proliferate in small and medium towns seeking immense growth potential.

•Kapoor perceives a growth rate of 70 to 90 % through 2010.

•Expand retail banking and Microfinance.

Questions

•Has knowledge banking helped in differentiation?

•Will concentration on niche market help in long run?

•How far has focus of yes bank on advanced technology and competent human resource been useful to yes bank?

Thank you