>YES BANK: Operates in four segments: treasury, corporate / wholesale banking, retail banking and other banking operations

Yes Bank Ltd. is engaged in providing a range of banking and financial services. The bank operates in four segments: treasury, corporate / wholesale banking, retail banking and other banking operations. Following the success of its version 1.0 strategy, the bank has embarked on a version 2.0 strategy.


• Total business continues to grow at more than industry growth rate Despite having major exposure to the corporate loans which largely includes infrastructure credit, the advances continues to beat the industry credit growth. The growth in the industry’s corporate credit moderated during the last few quarters to around 14% Y-o-Y. However, bank’s advances have grown at a CAGR of 22% as on March 31st 2012 since FY09. However, during FY12, the advance growth of the bank too moderated form its historical trends, following the rate hike pressure during the year.


• Asset quality remains strong As on March 31st 2012, total gross NPA of the industry stood at around Rs 1.2tn, which has grown by around 40% Y-o-Y. Notwithstanding, the asset quality of the bank has remained firm as GNPA of the bank has grown by only 4% Y-o-Y in FY12.


• Stable NIM due to increase in CASA Yes Bank is one of the few banks which increased the saving a/c rates following its deregulation. As a result, the CASA share, which remained the lowest in the industry at 10% has jumped to 15% in FY12. The bank has stated that it plans to take it to 20% in the upcoming periods. Going forward, we therefore believe that higher CASA share will protect its margin.


• Diversification in retail business Historically, the bank has majorly positioned itself in the big ticket corporate loan with almost nil exposure to the retail segment. However, during the last 2 years the bank has started diversifying into the retail segment. Increase in the retail exposure is likely to help maintain its margins.


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RISH TRADER