yes bank investor presentation q2fy10

8/9/2019 Yes Bank Investor Presentation q2fy10

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INVESTOR PRESENTATION

Q2FY10 Update


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Key Financial Highlights Q2FY10 and H1FY10

Net Profit after Tax of Rs. 1,117.1 million in Q2FY10

compared to Rs. 636.2 million in Q2FY09 representing an

increase of 75.6%; Net Profit after Tax of Rs. 2,117.8 million in

H1FY10 compared to Rs. 1,179.5 million in H1FY09

representing an increase of 79.6%

Net Interest Income (NII) of Rs. 1,599.4 million in Q2FY10

compared to Rs. 1,225.9 million in Q2FY09 representing an

increase of 30.5%; NII of Rs. 3,236.7 million in H1FY10

compared to Rs. 2,355.5 million in H1FY09 representing an

increase of 37.4%

Q2FY10 and H1FY10 - Revenue and Profit growth

Rs. million Q2FY10 Q2FY09 % g H1FY10 H1FY09 % g

Net Interest Income 1,599 1,226 30.5% 3,237 2,355 37.4%

Non Interest Income 1,516 918 65.0% 2,968 1,857 59.8%

Total Net Income 3,115 2,144 45.3% 6,205 4,212 47.3%

Operating Expense 1,197 1,049 14.1% 2.309 1,980 16.6%

Operating Profit 1,918 1,095 75.2% 3,896 2,232 74.5%

Provisions & Contingencies 234 123 90.2% 689 431 59.9%

Provision for Tax 567 336 68.6% 1,089 622 74.9%

Net Profit after Tax 1,117 636 75.6% 2,118 1,179 79.6%

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Total income (NII plus Non Interest Income) of Rs. 3,115.3

million in Q2FY10 compared to Rs. 2,144.3 million in Q2FY09

representing an increase of 45.3%; Total Income of Rs. 6,204

million in H1FY10 compared to Rs. 4,212.9 million in H1FY09

representing an increase of 47.3%

Operating Profit of Rs. 1,918.0 million in Q2FY10 compared

to Rs. 1,095.5 million in Q2FY09 representing an increase of

75.2%; Operating Profit of Rs. 3,896.0 million in H1FY10

compared to Rs. 2,232 million in H1FY09 representing an

increase of 74.5%

Robust growth in both NII and Non Interest Income; Q2FY10 PAT up by 75.6% y-o-y

Non Interest income to Total Income ratio of 48.7% in Q2FY10;47.8% in H1FY10

Cost to Income ratio of 38.4% in Q2FY10; 37.2% in H1FY10

Non Interest Income constitutes the following

Business Segment Q2FY10

Financial Markets 33%

Transaction Banking 23%

Financial Advisory 37%

3rd Party Distribution, Retail Fees and Others 7%


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Key Financial Highlights Q2FY10 and H1FY10

Advances at Rs. 162.9 billion as at Sep 30, 2009; Growth of 41.5%y-o-y

Gross yield on advances of 11.1% in Q2FY10; 12.7% in Q2FY09

Deposits at Rs. 193.7 billion as at Sep 30, 2009; Growth of 35.1% y-

o-y

Cost of funds of 7.2% in Q2FY10; 9.2% in Q2FY09

Net Interest Margin of 3.1% in Q2FY10; 2.9% in Q2FY09

H1FY10 - Balance sheet growth

Rs. million Sep 30, 2009 Sep 30 2008 % g

Advances 162,943 115,149 41.5%

Investments 69,814 51,452 35.7%

Total Assets 263,701 193,545 36.2%Shareholder's Funds 18,443 14,383 28.2%

Tier I + Tier II Capital 36,081 27,455 31.4%

Deposits 193,651 143,384 35.1%

3

. .

(annualized) in Q2FY09

Return on Equity of 25.0% in Q2FY10; 18.1% (annualized) inQ2FY09

Basel II Capital Adequacy Ratio of 17.3% at Sep 30, 2009 (Tier I at9.4%)

Total Capital Funds (Tier I + Tier II) of Rs. 36.1 billion as at Sep30, 2009 (Rs. 27.5 billion as at Sep 30, 2008)

Book value per share of Rs. 61.85 as at Sep 30, 2009

Basic EPS of Rs. 3.76 and Diluted EPS of Rs. 3.68 for Q2 FY10

Profitable Balance Sheet growth; Net NPAs of only 0.08%

Gross NPA at 0.31% to Gross Advances as at Sep 30,2009

Net NPA at 0.08% to Net Advances as at Sep 30, 2009

Total loan loss coverage ratio of 266.0%; Specific loanloss coverage ratio of 74.9% as at Sep 30, 2009

Bank restructured Rs. 450 million of loans (0.28% ofGross Advances as at Sep 30, 2009) during Q2FY10.

Total restructured advances of Rs. 1,559 million (0.96%of Gross Advances as at Sep 30, 2009)


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Key Business Highlights

Steady growth in Net Interest Income (NII)

Steady growth in NII on account of growth in Advances &Investments and improving margins

Advances grew by 41.5% y-o-y while Investments grew by35.7% y-o-y.

NIM for Q2FY10 increased to 3.1% from 2.9% in Q2FY09

Resilient Non Interest Income streams

Non Interest Income rew b 65.1% to Rs. 1,516 million in

INR million

2,000 Net Interest Income Non Interest IncomeINR million

-

50,000

100,000

150,000

200,000

Q2FY07 Q2FY08 Q2FY09 Q2FY10

Advances Non-Funded Trade Exposure

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Q2FY10 (48.7% of Total Income) compared to Rs. 918.4 millionin Q2FY09 (42.8% of Total Income).

Non interest income streams like Financial Advisory,Transaction Banking, Financial Markets and Third partydistribution, retail fees & others continued the upward trendshowing impressive improvements y-o-y.

Financial advisory income in particular for Q2FY10 grew byover 100% as compared to Q2FY09

Superior Shareholders returns

Amongst the highest RoE (25.0% annualized) and RoA (1.86%annualized) in the banking industry during Q2FY10

Consistently generating superior shareholder returns - RoE of more than 20% for 4th consecutive quarter

-

500

1,000

,


-

500

1,000

1,500

2,000

2,500


Operating Profit Net Profit

INR million


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Key Business Highlights

Capital Funds

CRAR of 17.3% and Tier I of 9.4% as at Sep 30, 2009

Total Capital Funds stand at Rs. 36.1 billion as at Sep 30, 2009 (Rs. 27.5 billion as at Sep 30, 2008)

Healthy Asset Profile

Gross NPA as a proportion of Gross advances reduced by 17 bpsq-o-q to 0.31% (0.48% in Q1FY10) while Net Non PerformingAssets as a proportion of Net advances reduced by 16 bps q-o-q

INR million

1400

Specific Provision General Loan Loss Provision Gross NPA

5

Efficient processes and risk management procedures in place thus ensuring a high quality asset profile

. . , . .

respectively as at Sep 31, 2008).

Adequate credit provisioning buffer; specific provision stands atRs. 375 million (75% of Gross NPA) while Total Loan LossProvision (Specific Provision + General Loan Loss Provision)stands at Rs. 1,331 million (266% of Gross NPA)

Bank restructured Rs. 450 million of advances (0.28% of Gross

Advances) during the quarter. Total restructured advances wereRs. 1,559 million (0.96% of Gross Advances) as at Sep 30, 2009.

Efficient Cost Control

Continued management focus on cost control resulted in Cost to Income ratio of 38.4% in Q2FY10 compared to 48.9% inQ2FY09; amongst the lowest in the Banking industry.

0

200

400

600

800

1000

1200

Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10


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Knowledge Driven Banking

Focus on Growth sectors

Knowledge based approach to lending; Food and

Agribusiness, Engineering, Infrastructure &

Logistics, TMT (Technology, Media & Telecom)

and Lifesciences & Chemicals constitute more than79% of total advances as at Sep 30, 2009

Food andAgribusiness;

18%

Infrastructure& Logistics;

16%

Engineering;Lifesciences

& Chemicals;

TMT; 18%

Others; 21%

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Knowledge driven banking approach ensures a well diversified, highly resilient and a healthy portfolio mix

Advances predicated on Large and Mid Corporates

More than 95% of non-Priority Sector Lending

(non-PSL) towards large (Wholesale Banking) and

mid (Commercial Banking) sized Corporate clients

Fully collateralized SME portfolio constitutes 4.3%of non-PSL advances as at June 30, 2009

Insignificant exposure to Retail AssetsCorporate

andInstitutional

Banking;72.3%

CommercialBanking;

23.2%

BranchBanking;

4.5%


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Well-diversified Liability Franchise

Diversified, granular & sticky liabilities mix from

multiple sources

Steady growth in number of liability accounts (from both

retail and corporate segments); total deposits grew by35.1% y-o-y to Rs. 193.7 billion in Q2FY10

Continuous management focus on increasing CASA

(9.6% of total deposits as on Sep 30, 2009) through

increased branch enetration and cash mana ement

CASA; 9.6% FD - BranchBanking;

13.6%

FD -Corporate

andInstitutional

FD -Commercial

FD - GovtBacked

Institutions;10.1%

Certificate ofDeposits;

18.2%

InstitutionalDeposits;

10.7%

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products; CASA grew by 43.4% y-o-y to Rs. 18.5 billionin Q2FY10

Number of operational branches stands at 126 across 100

locations as at Sep 30, 2009

Floats from multiple banking relationships across allthree business segments

Cost of funding reduced to 7.2% in Q2FY10 as compared

to 9.2% in Q2FY09

Granular and Relationship driven deposits continue to the bedrock of our Business Strategy

Number of Liability Accounts

Banking;

32.2%

Banking;

5.6%

60000

80000

100000

120000140000

160000

180000

200000

Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10


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KNOWLEDGE CAPITAL

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A Differentiated Approach to Banking

Knowledge Banking

Focuses on the sunrise sectors of the Indian economy

Institutionalized a Development & Knowledge Bankingdivision

Provides industry specific financial solutions which facilitate superior

structuring and tailored financial solutions

One Bank approach ensuring superior cross sell of productsMoney Doctor approach of diagnostic & prescriptive product

structuring

Thought leadership initiatives across emerging sectors Food &

Agribusiness, Infrastructure, IT, Lifesciences among others

Quarterly Update YES BANK launched a customized online solution

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for the Travel and Tourism sector at the 58th Annual Congress

organized by the Travel Agents Association of India (TAAI) in Dubai.

YES BANK was the Sole Banking Partner to the TAAI convention.

Responsible Banking

Principles of Corporate Social Responsibility and Sustainability

integrated as a key business driver

Triple Bottom Line approach of People, Planet, ProfitQuarterly Update - YES BANK partnered the 20th South Asian

International Fundraising Workshop (SAFRG) organized by the South

Asian Fund Raising Group (SAFRG) from August 8-11, 2009 in Jaipur.

YES BANK partnered Save The Children to support ARAAISH, a

fundraising event for the empowerment of underprivileged children.

Only Bank to receive the Emerging Markets Sustainable Bank of the Year award at the FT/IFC SustainableBanking Awards

Economic principles

Sustainability Zone i.e.combined economic,

environmental, social benefit

Social investments

Pure philanthropy

Pu

re

profit


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RELATIONSHIP CAPITAL

10


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Corporate and Commercial Banking

Customer Segmentation

Large Corporates with more than INR 10 billionturnover, Government companies and PSUs,

Financial Institutions and Banks, selectmultinational corporations

Typical exposure in the range of INR 300-1000 mn

Business Highlights


Emerging mid-Corporates of India withturnover between INR 1.0 billion and INR 10billion

Typical exposure in the range INR 50-300 mn

Business Highlights

Suite of lain vanilla and structured solutions

Corporate and Institutional Banking Commercial Banking

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uite o structure an vani a so utions inc u ing

working capital finance, transaction banking,treasury products, corporate finance & investmentbanking

Advances at INR 97.9 billion as at Sep 30, 2009comprising 72.3% of non-PSL advances

Business Strategy

Capitalize on current market conditions toimprove penetration in large and reputed businesshouses to move up the value chain and increasecross-sell

Build long term, comprehensive relationships forthese marquee Corporates

One Bank approach thereby offering complete suite of products to Wholesale and Commercial Banking clients

including working capital finance, transaction

banking, treasury and selective structuredfinance


Business Strategy

Selectively identify emerging sectors &companies for long term institutionalization ofrelationship capital by leveraging knowledgebanking approach

Become a privileged growth partner for theselarge Corporates of tomorrow


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Branch Banking (Business Banking and Retail)


Small and Medium Enterprises (SMEs) with

turnover less than INR 1.0 billion (with a focuson the INR 0.5 1.0 billion range)

Focus on supply chain partners of largerCorporates

Typical exposure in the range INR 20-100 mn


Small businesses near branch areas

Focus on affluent and mass affluent Retailcustomers

Focus in leveraging Corporate relationships forsalary accounts

Business Banking (SME) Retail Banking (Includes Small Businesses)

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Branch Banking to be a key value driver for the next level growth of the bank

Business Highlights

Product suite comprises fully secured,collateralized working capital credit in tandemwith liability products like Cash managementservices and payment solutions


Business Highlights

43.4% y-o-y growth in CASA in Q2FY10

285% y-o-y growth in the total ATMtransactions (Sep 30 2009)

43% of the Banks Savings Account Customershave Net Banking Account (Industry average isonly 15%)

Business Strategy

Focus on liabilities generation and transactional products

Service and Technology to be key differentiators for the Bank


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PRODUCT CAPITAL

13


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Transaction Banking

Payments Bank of India

Significant investment made in this gestationary business

since the inception of the Bank

Catering to Corporates, Domestic & InternationalFinancial Institutions

Focus on creating financial efficiencies through

Number of Transactions

0

200

400

600

800

1000


LC BG BC

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YES BANK won the Financial Insights Innovation Award (FIIA) for the Most Innovative e- PaymentsSolution in Asia for two consecutive years, FY08 and FY09

Pioneering Direct Banking Channel Innovations to createe-Financial Supply Chain Solutions

Operating A/C banker to top Corporates

Collections/payments mandates from leading Corporates

Business grew by 25% y-o-y during the quarter

Income from Transaction Banking

-50

100150200250300350400


INR million


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Financial Markets

Product suite comprise Fixed income sales, Debt Capital Markets(DCM), Fixed income trading and Balance Sheet Management

Array of products right from vanilla FX spot/forward tostructured currency/interest rate swaps/fixed income productsand risk solutions

Focus on Wholesale and Commercial Banking clients; noexposure to SME clients

Superior relationships with domestic business houses and reachinto AAA issuers and emer in mid sized Cor orates for the

DCM Deals for the Quarter

Sole Arranger

INR 2 bn of5 Year Bond Issue

2009

Sole Arranger

INR 250 mn3 year Bond Issue

2009

RuralElectrification

Corp.

Joint Arranger

INR 23 bn of 3/10year Bond Issue

2009

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DCM desk

State of the art technology platform Murex; pricing andstructuring capability at par with the best in the industry

Dedicated Research Economic Knowledge desk Fundamentaland technical analysis and Macro Economic Analysis

Financial Advisors rather than just product & Service providers

Late night desk to cater to client deals in US time zone

Consistently ranked among the 10 by Thomson Reuters in the Indian Rupee Bond League Tables

Income from Financial Markets

-

100200

300

400

500

600


INR million


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Financial Advisory

Structured solutions to meet specialized clientrequirements

Knowledge & product expertise in infrastructure, realestate, financial restructurings, acquisitions & leveragedfinance

InfrastructureBanking

Structured &Project Finance

Project Advisory &Syndication

Select Transactions for the quarter

YES BANK was the Exclusive Strategic andFinancial Advisor divestment of 100% equityownership in Super Wind Project PrivateLimited, a company owning and operating 45MW of wind turbines, to Techno ElectricEngineering Company Limited.

YES BANK was the Advisor to AsmithaMicrofin Limited, amongst the top five micro

Corporate Finance

RealtyBanking

16

Comprehensive role from pre-zero date advisory, taking

meaningful exposure and syndication of balancerequirements

Strong expertise in Financial Advisory practice demonstrated by a 135 % y-o-y increase in revenues

Investment Banking

,

its second round of equity infusion byBlueOrchard Private Equity Fund

Private Equity

Syndication

M&A

Advisory

Healthy transaction origination (both inbound &outbound)

Successfully executed over 100 PE and M&A dealsduring the last 5 years

Consistently ranked amongst the top 10 in cross-borderoutbound M&A Indian league tables by Bloomberg

0

100

200

300400

500

600


INR million

Income from Financial Advisory


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Name Designation Previous Assignment

Rana Kapoor Founder/ Managing Director & CEO Managing Partner / CEO & Managing Director - Rabo India, Bank of America(16 years)

Rajat Monga Group President Financial Markets & Chief Financial Officer Head of Treasury - Rabo India

Sunil Gulati Group President Corporate and Institutional Banking Managing Director - GE Commercial Finance

Varun Tuli Group President Branch Banking Executive Director and Country Head - Avigo Capital Partners/ Bank of America

Sumit Gupta President Commercial Banking Associate Director & Head (North) - Rabo India

Arun Agrawal President & Global Head International Banking General Manager ICRA

Surendra Jalan President Indian Financial Institutions AGM, Corporate Banking - ICICI Bank

Suhail Kazmi President Insurance and Wealth Management Retail Head, West and South India - ABN Amro Bank

Somak Ghosh Grou President Cor orate Finance and Develo ment Bankin Director Pro ect Advisor & Infrastructure M mt - Rabo India

Execution focused Human Capital

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Suresh Sethi Group President Transaction Banking Group, InternationalBanking, Liabilities & Investment Mgt. Global Transaction Services Head - Caribbean, Central & Latin America, Citibank N.A.

Aditya Sanghi President & Sr. Managing Director Investment Banking Executive Director, Head of Mergers & Acquisitions - Rabo India

Kavita Venugopal Group President and Chief Risk Officer Executive Director, Investment Banking, Kotak Mahindra Capital Company

Deodutta Kurane President Human Capital Head of HR - Bajaj Allianz Life Insurance

Alok Rastogi President & Chief Operating Officer Citibank N.A.

Devamalya Dey President Audit & Compliance Vice President , Audit & Risk Review - Citigroup

Anindya Datta Chief Marketing Officer Manager, Markets KPMG

Umesh Jain President & Chief Information Officer Citigroup IT Operations & Solutions ( CITOS)

Awarded the Qimpro Best Prax Compass Award for Innovative Practices in Customer Service Channels

Top management team drawn from top private sector and foreign banks in India and abroad

Rana Kapoor was adjudged the Start up Entrepreneur of the Year at the E&Y Entrepreneur Awards 2005 & received the PHDCCI DistinguishedEntrepreneurship Award 2007 at the PHDCCI Awards for Excellence 2007

Stock purchase / option plans enable senior management and employees to own substantial capital of the Bank at all times


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Capital Structure

Successful entrepreneurial track record at Rabobank India

Held leadership positions at Bank of America(16 years),ANZ Grindlays(2.5 years)

Promoter

Promoter;31.3%

EmployeesFDI; 18.3%

NRIs; 0.5%

Others;11.1%

Pedigree domestic and foreign investors in Banks HybridTier I and Tier II capital (LIC, Public Sector Banks,

Rabobank)

YES BANK successfully raised INR 260 crore ofsubordinated Lower Tier II debt through privateplacement issue to marquee investors like LIC, IFCIand GIC. The bonds have a maturity of 127 months

Hybrid Tier I / Tier II Investors

Shareholding

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Key Shareholders (> 1%)(*)

Rabobank 18.12%Orient Global 4.93%

HSBC Financial Services 4.88%

Khazanah Nasional 4.69%

Templeton MF 4.28%

New Vernon 1.62%

.

MutualFunds;8.7%

FII; 29.2%

.

YES BANK successfully entered into an agreementwith PROPARCO to raise USD 20 million (Rs. 93crore) Upper Tier II debt. YES BANK is the firstIndian Bank to raise capital from PROPARCO, theprivate sector investment arm of Agence Franaisede Dveloppement (AFD), the leading Frenchmultilateral development finance agency. Theinstrument has a maturity of 15 years with a calloption with YES BANK at the end of 10 years fromthe date of subscription.

* As on Sep 30 2009


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No representation or warranty, express or implied is made as to, and no reliance should be placed on, the fairness, accuracy,

completeness or correctness of such information or opinions contained herein. The information contained in this presentation is only

current as of its date. Certain statements made in this presentation may not be based on historical information or facts and may be

forward looking statements, including those relating to the Companys general business plans and strategy, its future financial

condition and growth prospects, and future developments in its industry and its competitive and regulatory environment. Actualresults may differ materially from these forward-looking statements due to a number of factors, including future changes or

developments in the Companys business, its competitive environment and political, economic, legal and social conditions in India.

This communication is for general information purpose only, without regard to specific objectives, financial situations and needs of

any particular person. This presentation does not constitute an offer or invitation to purchase or subscribe for any shares in the

Important Notice

19

Company and neither any part of it shall form the basis of or be relied upon in connection with any contract or commitment

whatsoever. The Company may alter, modify or otherwise change in any manner the content of this presentation, without obligation

to notify any person of such revision or changes. This presentation can not be copied and/or disseminated in any manner.


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THANK YOU

yes bank investor presentation q2fy10

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