yes bank story

8/9/2019 Yes Bank Story

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YESBANK

RESULTSU

PDATE(FY09&Q

4FY09)

YES BANK Results Update (FY09 and Q4FY09)

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 of24.2%

! Net interest income (NII) of Rs. 5111.8 million in FY09 compared to Rs. 3305.7 million in FY08 representing an increase of54.6%; 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 FY08representing an increase of 41.8%; Total Net income of Rs. 2449.8 million in Q4FY09 compared to Rs. 2143.2 million inQ4FY08 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

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 significantheadroom for growth. During the fiscal year, Bank mobilized capital funds of Rs. 10.6 billion (the highest since inception inthe most challenging environment) including Rs. 1.54 billion of Tier I Perpetual Capital Bonds during Q4FY09 (issue over-subscribed by 105%), the first by any Indian private sector Bank during FY09. Total capital funds stand at Rs. 30.67 billion asat 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) resultedin 13% reduction of total RWA for the bank improving the CRAR to 16.63% under Basel II as against 14.53% under Basel I asat Mar 31, 2009; manageable Gross and Net NPA ratios coupled with prudent provisioning policy (total provisioning coverof 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 arelatively higher proportion of interest sensitive liabilities; NIM of 2.9% in FY09 (2.7% in FY08).

! Superior S hareholders returns: Amongst the highest RoE (20.7%) and RoA (1.52%) in the Banking industry during FY09signifying sustained and profitable revenue growth during a difficult year for the economy.

Continuing Awards & Recognitions

! YES BANK was ranked as one of the Worlds 25 Unsung Innovative Companies by the leading international BusinessWeekmagazine. The Unsung list is based on a Boston Consulting Group survey of senior executives across the world whenasked to name an innovator others would not have thought of. YES BANK is the only Indian Bank to be ranked in thisprestigious global ranking.

! YES BANK was recognized with a Special Citation for its Innovative & Superior Direct Banking Services, at the FinancialInsights Innovation Awards (FIIA) 2009 presented at the 5th Annual Asian Financial Services Congress held at Singapore onFebruary 27, 2009.


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RESULTSU

PDATE(FY09&Q

4FY09)

Summary Results & Prior Period Comparison

Rs. Mil lion FY09 FY08 Growth% Q4FY09 Q4FY08 Growth %

Net interest income 5,112 3,306 54.6% 1,552 1,067 45.4%

Non interest income 4,690* 3,606 30.1% 898 1,076 -16.6%

Total net income 9,802* 6,912 41.8% 2,450 2,143 14.3%

Operating expense 4,186* 3,411 22.7% 911 934 -2.5%

Operating profit 5,616* 3,501 60.4% 1,539 1,209 27.3%

Provisions & contingencies 958* 435 120.2% 322 228 41.0%Provision for tax 1,621 1,065 52.2% 416 336 24.0%

Profit after tax 3,038 2,000 51.9% 801 645 24.2%

Sustainable Revenue Generation Well Positioned for Upturn

o Pricing power on loans driven by a predominantly Corporate loan book and re-pricing of a relatively higher proportionof interest sensitive liabilities resulted in improved margins (NIM of 2.9% in FY09 versus 2.7% in FY08)

o Increasing share of vanilla commercial banking revenues (transaction banking, remittances, FX sales, retail fees &charges), negligible dependence on capital markets (no presence in equity broking, no prop desk for equities), andnew/emerging lines of business Debt Capital Markets (marquee clients include L&T, HDFC, Grasim, PFC), LoanSyndication (SKS Micro Finance) provided a stable non-interest income stream during FY09

Income and Profitability trends and Prior Period Comparison

Rs. Mil lion Q4FY09 Q3FY09 Q2FY09 Q1FY09 Q4FY08

Net Interest Income 1,552 1,204 1,226 1,130 1,067

Non Interest Income 898 1,935 918* 939* 1,076

Transaction Banking (Trade/ Guarantee) 252 187 282 207 178

Financial Markets 332 1,490 271 252 347

Financial Advisory 204 127 240 336 318

3rd party distribution and others 110 131 125 144 233

Total Income 2,450 3,139 2,144 2,069 2,143

Non Interest Income as a % of Total Income 37% 62% 43% 45% 50%

Operating Expense 911 1,295 1,049 931 934

Operating Profit 1,539 1,844 1,095 1,138 1,209Net Profit 801 1,058 636 543 645

Cost to Income ratio 37% 41% 49% 45% 44%

NIM 3.0% 2.8% 2.8% 2.9% 3.1%

RoA (Annualized) 1.50% 2.16% 1.39% 1.26% 1.61%

RoE (Annualized) 20.2% 28.4% 18.1% 16.1% 20.1%

* Adjusted for a like to like comparisonSummary Balance Sheet & Prior Period Comparison

Rs. MillionMar 31,

2009Dec 31,

2008Sep 30,

2008 Jun 30,

2008Mar 31,

2008Growth overMar 31, 2008

Assets 229,008 197,466 193,545 173,895 169,824 34.8%

Advances 124,031 109,349 115,149 100,517 94,303 31.5%

Investments 71,170 69,528 51,452 50,715 50,937 39.7%

Liabilities 229,008 197,466 193,545 173,895 169,824 34.8%

Shareholders Funds 16,242 15,441 14,383 13,742 13,189 23.1%

Hybrid Tier I + Tier II Funds 14,460 12,920 12,920 10,920 7,275 98.8%

Total Capital Funds (Tier I + Tier II) 30,674 28,478 27,455 24,938 20,720 48.0%

Deposits 161,694 135,391 143,384 125,522 132,732 21.8%


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RESULTSU

PDATE(FY09&Q

4FY09)

Resilient and High Quality Asset Profile

Strong Asset Quality

o Gross NPA at Rs. 849.3 million (0.68% of Gross Advances)and Net NPA at Rs. 411.6 million (0.33% of Net Advances)as at Mar 31, 2009

o Adequate credit provisioning buffer; specific provisionstands at Rs. 437.7 million (51.5% of Gross NPA) whiletotal provision stands at Rs. 1228.9 million (144.7% ofGross NPA) as on Mar 31, 2009

o Prudent provisioning policy ensuring general provisioncover significantly more than regulatory requirement

Manageable exposure to stressed industries

Food and

Agribusiness; 22%

Infrastructure &

o Knowledge based approach to lending; Food andAgribusiness, Engineering, Infrastructure & Logistics,TMT (Technology, Media & Telecom) and Lifesciences &Chemicals constitute approx. 74% of total advances as atMar 31, 2009

Logistics; 15%

Engineering; 16%

Lifesciences &

Chemicals; 7%

TMT; 13%

Others; 27%

o Manageable exposure to stressed sectors; total exposure toreal estate, iron and steel, sugar, textiles, auto components

sectors is about 10%o No NPA or restructurings in real-estate sector; security

cover for real-estate exposure stands at more than 3.5times the current outstanding

o No international presence; no exposure to toxic assetso Less than one third of regulatory limits utilized towards

capital market exposure

o No secondary market equity exposure since April 2008;Zero risk in this asset class

o No pending legal cases by/ against the Bank related totreasury exposures

Retail (Including

Small Business

Loans); 1.1%

Business

Banking - SME;6.2%

Commercial

Banking; 29.2%

Wholesale

Banking; 63.5%

Healthy loan book predicated on large and mid Corporates

o More than 92% of Non-PSL advances towards large(Wholesale Banking) and mid (Commercial Banking)Corporate clients

o Fully collateralized SME portfolio constitutes 6.2% of totalNon-PSL advances as at Mar 31, 2009

o 85% of PSL advances structured as pooled credit toinstitutional distributors/ vendors with embedded riskmitigants

o Weighted average sales turnover of Wholesale Bankingclients at approx Rs. 18 billion; Rs. 4.3 billion forCommercial Banking clients; sales turnover of SME clientsgenerally between Rs. 500-1000 million

o High quality corporate exposure (80% of the externallyrated exposure rated A and above) resulted in 13%reduction of total RWA for the bank improving the CRAR

to 16.63% under Basel II from 14.53% under Basel I as atMar 31, 2009

Insignif icant exposure to retail assets

o Retail advances (including Small Business Loans) of Rs. 1066 million as at Mar 31, 2009o No exposure to credit cards segments, mortgages, auto loansDisclosure on Restructuring

o Approximately 87% of Gross NPA is currently under Restructuringo All Corporate Restructuring cases are in Wholesale/ Commercial Banking segments; no NPAs or Restructuring in

SME segment currently


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RESULTSU

PDATE(FY09&Q

4FY09)

o Details of Restructuring exercise during FY09 is as followsO/s (Rs. million) % of Advances

Completed Restructuring (All Standard Assets) 293.9 0.24%

Under Restructuring (All Standard Assets) 200.4 0.16%

Under Restructuring (Classified as NPA) Corporates 715.6 0.58%

Under Restructuring (Classified as NPA) Retail 27.0 0.02%

Well Diversified Liabilities Mix Relatively Better positioned to Benefit from Declining Interest Rateso Diversified, granular and sticky deposits mix from

multiple sources

o Steady growth in number of liability accounts (Fromboth retail and corporate segments); total deposits grewby 21.8% to Rs. 161.7 billion in FY09

o Continuous management focus on increasing CASA(8.74% of total deposits as on Mar 31, 2009) throughincreased branch penetration and cash managementproducts; CASA grew by 25.1% to Rs. 14.1 billion inFY09

oLarge proportion of interest-sensitive liabilitiesresulting in significant reduction in cost of funding forthe bank in the current low interest rate regime

Well-capitalized for Upturn

o Successfully raised more than Rs. 10.6 billion of Tier I (including Hybrid Tier I and Retained Earnings) and Tier IIcapital in FY09 (the highest since inception in the most challenging times for the economy) including

! Rs. 3.64 billion in a combination of Rs. 3.43 billion Upper Tier II and Rs. 0.21 billion of Hybrid Tier I capital fromRabobank (Europes only AAA rated Bank) in Q1FY09

! Rs. 2.0 billion of Upper Tier II subordinated debt from Life Insurance Corporation of India in Q2FY09! Hybrid Tier I (perpetual bonds) of Rs. 1.54 billion in Q4FY09; the first by any Indian Private Sector Bank in FY09

o Basel II Tier I at 9.50% and total CRAR at 16.63% as on Mar 31, 2009 providing significant head room for growtho Total capital funds of Rs 30.67 billion as at Mar 31, 2009 as against 20.72 billion at Mar 31, 2008. Full retention of

earnings since inception.

o Weighted average residual tenor of Tier II capital stands at more than 12 years currently; only Rs. 1000 millionrepayable in the next 5 years; Hybrid Upper Tier II is 75 % of Tier II

o Bank continues to be rated A1+ for short terms and LAA- for subordinated long term debt offerings by ICRAKnowledge & Sustainability Initiativeso YES BANK was a Knowledge Partner at the 6th Global Knowledge Millennium Summit 2009 organized by

ASSOCHAM.

o YES BANK was the Knowledge Partner to a thought leadership Summit The Great Migration Wave: Is Urban IndiaReady? in New Delhi on January 23, 2009, organized by the American India Foundation.

Retail Banking & Wealth Management

o YES BANK has 117 operational branches across 92 citiesnationally, 93 offsite ATMs in Mumbai, NCR and Pune alongwith 2 National Processing Centres at Mumbai and Gurgaonas at Mar 31, 2009.

Shareholding Pattern

o Foreign shareholding at 50% as at Mar 31, 2009o Key pedigree foreign shareholders include Rabobank, Orient

Global, AIF Capital, Khazanah Nasional, HSBC GlobalInvestment Fund, Swiss Re among others


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