Yes Bank (YESBANK) Q4 05/06 earnings summary

Executive summary

• First full year of commercial operations delivered net revenue of Rs. 1,852 million and net profit of Rs. 553 million; prior comparison period covered November 21, 2003–March 31, 2005.

• Total assets reached Rs. 41,626 million at March 31, 2006; advances were Rs. 24,071 million, deposits Rs. 29,104 million, and NPAs remained at zero.

Financial highlights

• FY05/06 net interest income was Rs. 855 million and non-interest income Rs. 997 million; net profit was Rs. 553 million versus a Rs. 38 million loss in the 16.5-month prior period.

• Operating profit was Rs. 991 million, profit before tax Rs. 844 million, and provisions and contingencies Rs. 148 million for FY05/06.

• Advances increased 216% to Rs. 24,071 million and deposits 339% to Rs. 29,104 million versus March 31, 2005; total assets increased 226% to Rs. 41,626 million.

• Operating expenses were Rs. 861 million, including employee costs of Rs. 501 million; growth investments in staff, branches and technology contributed to higher costs.

Outlook and guidance

• FY06/07 plans emphasized accelerated growth, branch-network expansion, customer acquisition, cross-selling and continued investment in technology and specialized talent.

• Management expected profitable growth and believed aggressive targets were achievable, while noting oil prices, currency volatility, high asset prices and instability as potential impediments.

• Basel II implementation work was underway, with full compliance expected within the stipulated timeframe; plans included risk-based pricing and eventual migration to RAROC.