Yes Bank (YESBANK) Q4 07/08 earnings summary

Executive summary

• FY07/08 delivered rapid growth: net revenue rose 89% to Rs 6,912 million and net profit rose 112% to Rs 2,000 million.

• Deposits grew 61%, advances 50% and total assets 53%; growth reflected wholesale lending, deposit mobilisation and investments in operating capacity.

• Strategy centered on knowledge-led, customer-focused banking, fee income, branch expansion and service technology, with continued investment in staff and infrastructure.

Financial highlights

• Net interest income increased 97% to Rs 3,367 million; non-interest income rose 82% to Rs 3,545 million, comprising 51.29% of net revenue.

• Operating profit increased 103% to Rs 3,500 million; profit before tax was Rs 3,064 million, and net profit rose 112% to Rs 2,000 million.

• Operating expenses increased 76% to Rs 3,412 million, including employee costs of Rs 2,024 million; provisions and contingencies were Rs 436 million.

• Deposits reached Rs 132,732 million, advances Rs 94,303 million and total assets Rs 169,824 million at March 31, 2008.

Outlook and guidance

• FY08/09 outlook forecast real GDP growth of ~8% and credit growth of ~20%; fiscal stimulus was expected to support demand, particularly in H2.

• Management expected profitable growth to continue and said it was confident of meeting aggressive targets; no specific bank-level numerical targets were stated.

• Branch expansion was underway toward 117 branches and 200 ATMs, from 67 branches and 75 off-site ATMs at the time.