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Yes Bank (YES IN – Rs268 - BUY)
Liability is #1 priority under Version 2 of growth plans
1. Management highlighted that under the bank’s growth strategy for the
next five years, strengthening of liability franchise will get the highest
attention.
Strengthening of liability
franchise will get the
highest attention
2. Bank plans to improve the share of low cost CASA deposits by expanding
branches and relationships with the corporate and retail clients.
3. In the current account segment, bank plans to focus on 12 sectors and
also scale-up its market share in transaction banking.
4. In the savings account segment, bank plans to grow through corporate
salary account relationships, focus on high net worth clients and nonresident
Indians.
5. Management believes that the CASA efficiency of branches is at an
inflexion point and a significant improvement is likely as the branch
network reaches 350-400 (as on Jun-11 the branch network was at 255).
Healthy and broad-based asset growth
6. The bank targets to deliver 30% Cagr in loans over FY11-15 with loan
book reaching Rs1tn.
The bank targets to
deliver 30% Cagr in loans
over FY11-15
7. Loan book will get more broad-based with share of branch-banking loans
(SME and retail) rising from current level of 12%, while the share of large
corporate lending is likely to decline from 65%.
8. Fee income will remain a key component of total income and the bank is
focusing to increase the share of transaction banking fees and higher
cross-selling to clients.
Asset quality holding-up
9. Management highlighted that in spite a strong 54% Cagr in loans over
past three years, its stressed assets are among the lowest (gross NPA at
17bps of loans and restructured loans of 26bps). Moreover, coverage
ratios are also among the highest.
Its stressed assets are
among the lowest and not
much stress seen ahead
10. The rise in interest rates and some slowdown in the economy have not
severely impacted the quality of loans.
11. In order to support growth in lending to SME and retail clients and
maintain strong asset quality, bank plans to make further investment in
risk management departments.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Yes Bank (YES IN – Rs268 - BUY)
Liability is #1 priority under Version 2 of growth plans
1. Management highlighted that under the bank’s growth strategy for the
next five years, strengthening of liability franchise will get the highest
attention.
Strengthening of liability
franchise will get the
highest attention
2. Bank plans to improve the share of low cost CASA deposits by expanding
branches and relationships with the corporate and retail clients.
3. In the current account segment, bank plans to focus on 12 sectors and
also scale-up its market share in transaction banking.
4. In the savings account segment, bank plans to grow through corporate
salary account relationships, focus on high net worth clients and nonresident
Indians.
5. Management believes that the CASA efficiency of branches is at an
inflexion point and a significant improvement is likely as the branch
network reaches 350-400 (as on Jun-11 the branch network was at 255).
Healthy and broad-based asset growth
6. The bank targets to deliver 30% Cagr in loans over FY11-15 with loan
book reaching Rs1tn.
The bank targets to
deliver 30% Cagr in loans
over FY11-15
7. Loan book will get more broad-based with share of branch-banking loans
(SME and retail) rising from current level of 12%, while the share of large
corporate lending is likely to decline from 65%.
8. Fee income will remain a key component of total income and the bank is
focusing to increase the share of transaction banking fees and higher
cross-selling to clients.
Asset quality holding-up
9. Management highlighted that in spite a strong 54% Cagr in loans over
past three years, its stressed assets are among the lowest (gross NPA at
17bps of loans and restructured loans of 26bps). Moreover, coverage
ratios are also among the highest.
Its stressed assets are
among the lowest and not
much stress seen ahead
10. The rise in interest rates and some slowdown in the economy have not
severely impacted the quality of loans.
11. In order to support growth in lending to SME and retail clients and
maintain strong asset quality, bank plans to make further investment in
risk management departments.
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