Yes Bank (YESBANK) Q4 09/10 earnings summary

Executive summary

• FY09/10 delivered strong expansion: balance sheet +58.9% to Rs 36,382 crore, advances +78.9%, deposits +65.7% and net profit +57.2% YoY.

• Growth was supported by higher interest income, wider net interest margin, rising fee income and lower cost-to-income; capital raising strengthened capacity for planned expansion.

• Completed six years of operations and entered Version 2.0, a 2010–15 growth phase focused on nationwide reach, integrated SME and retail banking and service quality.

Financial highlights

• Net interest income rose 54.7% to Rs 788 crore; non-interest income increased 31.7% to Rs 576 crore; net revenues reached Rs 1,364 crore, up 44.1%.

• Operating profit increased 63.6% to Rs 864 crore; profit before tax was Rs 727 crore and net profit rose 57.2% to Rs 478 crore.

• Total assets reached Rs 36,382 crore; deposits Rs 26,799 crore, advances Rs 22,193 crore and investments Rs 10,210 crore at March 31, 2010.

• Operating expenses rose 19.5% to Rs 500 crore, below revenue growth; provisions and contingencies increased to Rs 137 crore from Rs 62 crore.

Outlook and guidance

• FY15 ambition: balance-sheet size of Rs 150,000 crore, 750 branches, 3,000 ATMs and 12,000 employees.

• Management planned continued investment in human capital, learning, systems and controls, service delivery, waste management and brand development during Version 2.0.

• Indian GDP growth was projected at 8.0%–8.75% for FY10/11; average inflation was expected at 6.0%–6.5%, with further monetary tightening anticipated.