yes bank strategy

Case Study 61© 2011 IUP. All Rights Reserved.

Yes Bank: Differentiationin Over-Competitive Market

Rajnandan Patnaik*

* Faculty of Strategy, IBS, Hyderabad, India. E-mail: [email protected]

The bank has grand plans for the future. Our mission is to build the finest qualitybrand in banking. We don’t want to be a production factory. We want to be good

distributors.

– Rana Kapoor, Yes Bank’s Founder, MD and CEO (in 2007)

Achieving Business Excellence through effective Relationship Management has been at theepicenter of our business strategy… Yes Bank will emerge even stronger in the future tobecome India’s best private, relationship-driven Banking organization, and steadily achieveour ultimate vision of developing into ‘The Best Quality Bank in the World in India’.

– Rana Kapoor, Yes Bank’s Founder, MD and CEO (in 2009)

Yes to Banking Services in IndiaIn 2009, Yes Bank was rated the #1 mid-sized bank (balance sheet less than 24,000 crore)at the Business Today in the KPMG India’s Best Bank Awards, 2009. It was also ranked the#1 fastest growing bank by Business Today and Financial Express and bagged the FastestGrowing Bank Award (balance sheet less than 30,000 crore) at the business world bestbank awards. It also was rated #1 on credit quality by Financial Express and new economyrated Yes bank as the most innovative bank in India. Moreover, some of these awards andaccolades seem to come every year to Yes bank, a ratification of good work that they do,by the industry (see Appendix 1 for more details). These achievements, year-on-year feelstaller when one realizes that this bank started nearly a decade later than the other privatesector banks. In 2000, when Yes Bank made its intentions clear of entering the Indianbanking sector, many felt that the bank and its promoters are over-optimistic in a highlycrowded and competitive Indian banking sector. Being a later entrant in a sector wherelarge private and public sector banks ruled the roost, the bank had two choices—eitherto be a me-too bank that emulates and provides similar services that others on anaggregate do; or else to tread the difficult path of strong differentiation, where the servicesand offering of the bank are unique.

The bank chose the later and this uniqueness was termed by the bank as the‘knowledge banking approach’. The support for knowledge banking approach was to beleveraged on information technology and human resources. The bank decided to providespecialized critical services to high potential and growing industries through its ownexpert personnel. This required the bank to hire domain experts from the industry andleverage their services through efficient use of technology. Information technology was

Case Study

The IUP Journal of Business Strategy, Vol. VIII, No. 2, 201162

also used by the bank to be efficient in ease of transactions, lower costs, heighten security,and offer other innovative solutions. The bank decided to outsource the informationtechnology function but retained the human resources (domain experts). The bank wenton to adopt fair and employee-friendly human resource practices, to the point of providingindependence to the employees towards new initiatives and projects.

Although the bank had been noticed in the market, many felt that the bank has togo a long way before it becomes a formidable player to bigger private banks such as ICICIand to bigger public sector banks such as State Bank of India. Impressive growth—whenbeing small is much easier than when you are large. With the economic slowdown, it sureis testing time for smaller banks, with lower coffers, as consolidation in the industry seemsto be the ‘writing on the wall’. Moreover, the decision of the government to furtheropening up of the sector to foreign multinational banks will create more pressure on theIndian banking sector and all the banks therein.

Indian Banking SectorThe Indian banking sector might have started to provide banking for the industry and afew groups of elitists who mattered, but the socialistic development forced the Indianbanking system to be there even in the remote part of the country. This ensured the spreadand extensive reach of banking, which some feel was the deciding factor in India’s growth.The Nationalization of banks in 1969 also benefitted the economy at that time andsubsequently with the opening up of the sector from 1991 showed the willingness of thegovernment to change with the times. The Indian banking system has seen a fewfundamental structural changes that can be termed as eras—from 1786 to 1969; from 1969to 1991; from 1991 till now.

The year 1786 saw the first bank, The General Bank of India, in operation andsubsequently banking was seen as a necessity for businesses or traders only. Theestablishment of three banks – Bank of Bengal, Bank of Bombay and Bank of Madras bythe East India Company, were later combined to create the Imperial Bank of India (whichlater was turned to State Bank of India in 1955 and nationalized it). Subsequently,Allahabad Bank, Punjab National Bank, Bank of India, Central Bank of India, Bank ofBaroda, Indian Bank, Canara Bank and Bank of Mysore were created. It was not until 1935that the central bank—Reserve Bank of India was established. The Banking CompaniesAct was introduced in 1949, especially as a reaction to the failures of small banks, whichwas later amended to the Banking Regulation Act in 1965, giving the Reserve Bank ofIndia, the central banking regulatory and controlling authority. However, the serviceswent on more-or-less in the same pattern till post-independence, when banks played amajor role in reconstruction and growth of the newly independent country.

The year 1969 saw the nationalization of banks as the answer to the public sector andgovernment support. During this period, although banking was seen by people as anecessity, but the services by the banks were never given importance. Even after the bankswere nationalized, the banks remained conservative in their services, but the spread to

Case Study 63

rural and other areas increased. It was not until 1975 when the regional rural banks cameinto being. With the first phase of nationalization of 14 banks in 1969 and second phasenationalization of seven more banks in 1980, saw the 4/5th of the banking sector underdirect government ownership. With the major banks under government ownership, theservices still remained poor, but the faith on the continuity and liquidity of banks becamehigh. This went on till the 1991 major reforms in banking sector towards liberalization,based on Narasimhan Committee report.

After 1991, the banking sector was opened to foreign banks that came in happilyconsidering the vast scale and scope of the Indian business and market. This led tocompetition and subsequent addition and refinement to banking services. Telephonebanking, net-banking, automated teller machines, quick and efficient banking services,and so on, became the minimum service levels for the banks. This phase, especially 1993,saw numerous Indian private banks, such as ICICI, HDFC, AXIS (previously UTI) and aftersome time, Yes Bank.

The result of reforms in the Indian banking sector was evidenced with the resilienceit showed during the recent economic downturn. Further, with competition from foreignand Indian private banks, even the public sector banks were forced to raise their level ofservices. Nevertheless, the strong capital adequacy control of the operating banks and theReserve Bank of India made the Indian banking sector to be at par with internationalstandards on capital adequacy. Further, the non-performing assets that went high duringthe 1969-1991 period went down significantly, raising the profitability and the health ofthe banks. Slowly banks realized that their employees are essentially important to achieveoperational efficiency or the high level of services, and Yes Bank was quick to understandit all. Interestingly, this phase saw the sector being freed from regulations, but ironicallyalso saw few re-regulations or refined regulations being put in place by the controllingcentral bank.

Yes BankYes Bank, incorporated in 2003, started its financial operations in the third quarter of 2004in Mumbai as a private sector bank. The bank’s promoters Rana Kapoor and Ashok Kapurown the controlling stakes of the bank, with financial assistance from Rabobank(a cooperative bank in The Netherlands). Kapoor has a deep experience of more than 25years in the sector and his erstwhile association with Rabobank India (subsidiary ofRabobank) as its CEO helped securing the above said financial assistance. Moreover, hisprevious experience with Bank of America (leading commercial bank in the US) also madehim a renowned banker in India. The other promoter, Kapur, was the first Asian countryhead of ABN Amro Bank (of The Netherlands is one of the largest banks in Europe, withworldwide operations), and was also a well-known person in the Indian banking sector.Overall the promoters had experience in Rabobank, Bank of America, ANZ Grindlays andABN Amro banks. The other equity partners of Yes Bank initially were CVC Citigroup(a venture capital subdivision of Citi bank), AIF Capital (one of the largest private equity


firm of Hong Kong), and Chrys Capital (an investment firm of Mauritius). For the equitypartners and their stakes in 2009 (Table 1).

Table 1: Key Shareholders of Yes Bank

Source: www.yesbank.in as on September 30, 2009

Institution/Individuals Holding (%)

Promoters 31.30

Employees 0.90

Rabobank 18.12

Orient Global 4.93

HSBC Financial Services 4.88

Khazanah National 4.69

Templeton MF 4.28

New Vernon 1.62

Other FIIs/FDIs/NRIs 18.18

Others 11.10

Operationally, it was Rana Kapoor, who hand picked the good top management team,each having an immaculate track record. It was this track record of the management thathelped Yes Bank to get license from the Reserve Bank of India, and subsequently theovertly successful initial public offering in 2005 (see Appendix 2 for Yes Bank’s financialhistory).

It was imperative for Yes Bank to differentiate itself from its established competitorsto attract customers. This required a clear value proposition that is critical to thecustomers. Kapoor chose the value proposition to be ‘knowledge-driven’, throughcustomized service offering, state-of-the-art technology, and expert human resources(see Exhibit 1 for more details). Being a small player, it was imperative for the bank tolook at the edges of the market, as the center of the market already has so many establishedlarge private and public sector banks.

Exhibit 1: What Does Yes Stand For?

Bill Clinton (42nd President of US) congratulated Rana Kapoor for having a great name for a Bank.Looking back, it is interesting to know how the bank finalized its name. An outcome of qualitativemarket research, it was ‘Yes’ to banking solutions that stood apart as a name. The promoters wishedto create a service-oriented banking philosophy that would have the ability to say yes to the customerrequirements. Over the years, the bank has said Yes to many things including:

• Yes to sustainable growth through a balance approach towards profit and philanthropy.

• Yes to sustainable partnerships through financial inclusion.

• Yes to sustainable leadership through in-depth knowledge.

• Yes to responsible community engagement for a sustainable future.

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The bank chose to target niches that were notadequately serviced by others. Focusing on theniche segments would mean specialized andcustomized services that only lean can effectivelyprovide and Yes Bank was ideally suited for this.Therefore, instead of focusing on mass retailbanking, the bank focused on corporate banking byoffering specialized services, and small and mediumenterprises happens to be one of those niches thatYes Bank chose to operate with. Yes Bank focusedon some key growth sectors including, food andagribusiness, engineering, infrastructure and

logistics, technology, media and telecom, and life-sciences and chemicals, that constituteabout 4/5th of the total business (see Table 2 for more details).

With the core strategy of the bank standing firm on transparency, trust andsustainability, Yes Bank established itself as one of the most efficient banks in the countryby adopting international standards on factors of quality and efficiency. The bank ensuredsustainability by adapting to the triple bottom line on “nurturing people, planet and profitprinciples to create enduring value, and a unique strategic position…” As Kapoor asserts“achieving business excellence through effective relationship management has been at theepicenter of our business strategy”. Yes Bank did little on advertising and decided toacquire new clients through personal relations of its managers and employees.

The world of business has numerous stories of ‘first-mover disadvantage’, when earlyentrants had to do with undefined factors or immature markets. Yes Bank could avoid thisby looking at the mistakes that other banks did at entry and the opportunities that other

Exhibit 1 (Cont.)

Source: www.yesbank.in and from various sources

• Yes to outstanding recognition through sustainable actions.

• Yes towards ensuring transparency through responsible governance.

Yes Signifies: attractive, smart, simple, serious, reliable, trustworthy, optimistic, positive, efficient anduniversal, distinctive and affirmative.

The brand vision of the bank is “to build best quality bank of the world in India”. It is clear thatYes Bank wants to be a world-class Indian bank. The brand is supported on five pillars that reflect thecore values of the bank, viz., growth (core promise with ‘say Yes to Growth’); trust (build on past andreinforce with current action with ‘say Yes to Trust!’); human capital (knowledge driven, entrepreneurialapproach with say Yes to finest talent); technology (innovative technology with say Yes to technologyevolution); and transparency and responsible banking (high accountability by focusing on sustainabilityand social responsibility with say Yes to good corporate governance practices). The bank claims that it“will continue to fulfill its promise through consistent communication under the brand positioning of‘experience our expertise’.

Table 2: Growth Sectors for Lendingwith Knowledge Bases Approach

Sector

Food and Agribusiness 18

Engineering 18

Infrastructure and Logistics 16

Technology, Media and Telecom 18

Life-Sciences and Chemicals 9

Others 21

Source: www.yesbank.in

Lending(%)


banks could not capitalize on. One such opportunity is with technology advantage(technology leap-frog), when other banks could only improve on their currentinformation technology infrastructure, Yes Bank brought in latest state-of-the-arttechnology for ensuring its service, quality and efficiency parameters. With the economyduring the 2000s growing at about 8-9% of GDP, the bank seems to enjoy the good times.

The bank edge over other players lies in the knowledge driven approach, whichinvolved expert advisory services towards specific solutions to clients, compounded bytheir information technology, and their focus on growth sectors. Yes Bank looked at adifferentiated approach of its offering through knowledge banking and responsiblebanking approaches. Knowledge banking is focused on the emerging sectors of Indianeconomy. The bank for the emerging sectors has institutionalized a development bankingdivision to provide industry specific financial solutions, increase scope to cross sellproducts, provide leadership initiatives and a analytical approach towards productstructuring. Responsible banking focuses on integrating corporate social responsibility andsustainability factors into its business model to increase trust, responsibility andtransparency. The bank has institutionalized a triple bottom line approach of people-planet-profit and supports social initiatives such as “save the children to supportARAAISH, a fund raising event for the empowerment of under-privileged children.”

Yes Bank uses the most modern IT solutions available in the banking sector, providesmultiple technology-enabled channels for convenient access to its customers. Somesuch technology enabled channels are internet banking, ATMs, mobile banking, phonebanking, and so on, and outsources most of its information technology to outsidepartners. Through IT outsourcing the bank strived to achieve higher efficiency throughautomation of numerous processes, maintain centralized databases and processing forspeedy retrieval of data, have numerous technology enabled new ‘touch-points’ withcustomers, integrate front-middle-back office functions, provide a stronger surveillanceand security system for transactions, and use real-time environment for good disasterrecovery process and back-up systems. The bank depends on capable service providerswho provide established tried technology and processes that are integrated into the ITsolutions that the bank needs. This mitigates risks and ensures lower cost and higherquality of IT services.

However, the bank does not outsource their human resource requirements to outsidecompanies. It treats its human resources as strategic assets. The promoters believe thatsustainable competitive advantage can be achieved through highly effective humancapital, driven efficiently by IT systems and processes. The bank, right from its initial dayshand-picked and developed expert talent and retained them. This was possible with thegrowth prospect it promised and delivered to those experts, who naturally chose to stickon with the company. The bank’s HR policy is seen as one of the most employee friendlyand the bank is treated as one of the most preferred place to work in the sector.

Case Study 67

Yes Bank aligned the goals of the organization with personal goals of its individuals andencouraged employees to be entrepreneurial and innovative. The bank introducedemployee ownership and attracted highly talented employees with higher pay thanindustry average. Some of the talent management programs the bank introduced were: Yesentrepreneur in action (for allowing employees to work on their pet projects), Yesprofessional entrepreneurship program (for developing the talent of its employees), Yesretail entrepreneurship program (for developing cutting edge specialized skills), the Yesschool of banking (for training in banking and financial services), Yes University andschool relations (for recruiting young talent straight from educational institutions) andYes mentor (for individual coaching).

Future GrowthThe bank has had a healthy growth till now (see Appendix 3 for more details). With thelowest NPA of less than 1% and a growth of more than 35 times on its total income(see Appendix 4 for more details), the bank seems to be doing well, perhaps doing wellwith the good times. Yet the recent economic downturn led the bank to rethink theirgrowth strategies. Kapoor seems upbeat with the bank’s performance over the years andits future prospects, “The Indian financial sector has experience a challenging businessenvironment over the past one year, consequent to difficult global developments.However, Yes Bank has continued its steady growth trajectory, and has had a highlysatisfactory business and financial performance for financial year 2008-09, clearly the mostchallenging year in the bank’s evolution. Despite the financial challenges, we have beenable to effectively demonstrate our combined capabilities and competencies in managingand responding to the impact of the global crisis on the Indian financial sector and YesBank.” However, some felt that it was the small size of the bank that inhibited the banktowards large exposure to economic downturn. Further, although the bank’s focus remainson small and medium enterprises, corporate and institutional banking still accounts formore than two-thirds of its business. Some others felt that the bank’s success has largelydepended on its use of high-end technology and human resources, and its revenue modelthat is dependent on steady stream of fee income. The high growth rate of the economywas good for the banking sector and even new entrants like Yes Bank could initially tideover their inefficiencies. But with the current downturn and the slow recovery of theeconomy, will be bank be efficient to compete with the bigger players in the Indianbanking sector, especially when the market pie is comparatively smaller? Will the bankremain as an urban bank or will it have a pan-India spread? Will it focus on retail banking,microfinance and other profitable offerings like credit cards?

Questions for Discussion• Was the Indian banking sector attractive when Yes Bank decided to venture?

Outline the evolution of the sector keeping the environmental change andorganizational change in mind.


• What position did Yes Bank chose to be—a challenger, follower, differentiatoror nicher? Outline the various strategies that Yes Bank adoptedfor—differentiation, growth, technology, marketing and human resource.

• Why did Yes Bank choose to outsource its information technology function butnot its human resources? Outline the plausible benefits and demerits of each.

Bibliography1. Abhijit V Banerjee (2005), “Shawn Cole, and Esther Duflo”, Banking Reform in India,

available at www.mit.edu

2. Anita Bhoir (2007), “We Have a Subprime Problem Brewing in PLs”, available atwww.business-standard.com

3. “Banking the Emerging India”, Gulf Business from www.yesbank.com (2007).

4. Deepika Sriraman (2005), “Positive Banking”, available at www.chennaionline.com

5. Gopalakrishna T R (2005), “Knowledge is Key”, The Week.

6. HRM Congress – February 1-3, 2007 available at www.yesbank.in (2007).

7. Lalit Batra (2006), “Market Volatility May Continue”, available at www.tribuneindia.com

8. “Post-IPO, Rabobank to Keep 20 pc Stake in Yes Bank”, available atwww.thehindubusinessline.com (2005).

9. Quantum Information Services Private Limited Independent Investment Research,“Yes Bank Limited”, available at www.equitymaster.com (2006).

10. Network Magazine (2006), “Banking on IT, Literally”.

11. “Next Phase of Banking Reforms Under Way”, available at www.hindu.com (2005).

12. Priya Kansara (2006), “Our NIM will be 3.5 Percent by 2010”, available atwww.business-standard.com

13. Rao N B, “Saying Yes to Innovation”, available at www.ibef.org/download/banking_story_06.pdf

14. Raghu Mohan (2005), “A Dream Comes True”, Business India.

15. Raghu Mohan (2007), “Say Yes to Growth”, Business World.

16. Richard Nevins (2006), “Gathering Pace”, Business India.

17. “Resounding, Yes for Yes Bank”, Asia Money (2006).

18. Ryan Rodriguez (2007), “The Yes Approach”, Business India.

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19. Soutiman Das Gupta (2005), “A Matter of Strategy”, available at www.networkmagazineindia.com

20. Sunita Jyoti (2007), “Banking on Knowledge”, available from www.yesbank.com

21. Vikas Kumar (2004), “Call of the Wild”, The Economic Times.

22. “Wireless Banking Gets the Nod”, available at www.intel.com/business/casestudies/yes_bank.pdf

23. www.en.wikipedia.org/wiki/Banking_in_India (2010).

24. www.yesbank.in (2010).

25. “Yes Banking on “Knowledge Approach”, available at www.thehindubusinessline.com(2005).

26. “Yes Bank Recognized for HR Strategy at the Employer Branding Awards 2007”,available at www.yesbank.in (2007).

27. “Yes Bank Wins Two Awards for Innovative Recruitment and HR Practices at theAsia Pacific.

Appendix 1

A List of Awards and Recognition Received by Yes Bank

New Economy First AnnualBanking and Finance Awards2008 (Dec.-Jan. 2008)

Business Today – KPMGBest Banks Annual Survey,2008 (December 2008)

Financial Times/IFC, Wash-ington-Sustainable BankingAwards, 2006 (June 2008)

Thomson Reuters (Septem-ber 30, 2008)

Financial Express-E&Y Sur-vey of India’s Best Banks of2007 (March 2008)

Yes Bank was awarded the “Most Innovative Bank in India” at the NewEconomy First Annual Banking and Finance Awards, 2008 held inLondon and were announced in the December 2008 issue of theInternational Magazine, New Economy. Yes bank is the only Indian bankto have won this award.

Yes Bank ranked No. 1 in the Business Today – KPMG best banksAnnual Survey 2008. Ranked No. 1 in 11 parameters amongst it peerswith balance sheet size less than INR 24,000 crore.

Yes Bank won the prestigious Emerging Markets Sustainable Bank of theYear Award at the Financial Times/IFC, Washington Sustainable BankingAwards held in London. Yes bank was the only Indian bank to havereceived this accolade out of 182 entries from 129 institutions across 54countries.

Yes Bank ranked No. 3 in the All Asian Securitized Bonds League(Ex Japan Ex-Australia) and ranked No. 5 in India Rupee Bond Leaguefor the period January 1, 2008 to September 30, 2008 conducted byThomson Reuters.

Yes Bank ranked # 3 among New Private Sectors Banks. Additionally,ranked #1 amongst all banks (56 banks comprising nationalized banks,old and new generation private sector banks and foreign banks in India)on credit quality, while being ranked #1 on growth in its category(#2 on growth overall).


Appendix 1 (Cont.)BT-Cirrus Newsmakers Study(February 2008)

HR Award (February 2008)

Financial Insights InnovationAward (FIIA) (February2008)

Business Today-KPMG Sur-vey of India’s Best Banks of2007 (February 2008)

BSE-NASSCOM Awards(December 2007)

PHDCCI Annual Award(December 2007)

Asset Benchmark Survey(September 2007)

Thomson Financial Rating(September 2007)

Community of GlobalGrowth Companies at theWorld Economic Forum,Geneva (September 2007)

The Times Ascent HR Excel-lence Awards 2007 (August2007)

US-India Business Council's(USIBC) (June 2007)

Yes Bank was ranked #7 within the banking sector in the fifth BT-cirrusstudy on the leading newsmakers, up from #14 in 2006. Yes bank wasranked #99 overall up 47 places from the ranking of #146in 2006.

Yes Bank received the ‘Global HR Excellence’ award and the ‘EmployerBranding’ Award for continuous innovation in HR strategy at the AsiaPacific HRM Congress.

Yes Bank received the Financial Insights Innovation Award (FIIA) forthe Most Innovative e-Payments Solution in Asia. Yes bank was the onlyIndian bank to receive this accolade from amongst 150 nominationsacross Asia Pacific.

Yes Bank ranked #2 among medium size banks and the fastest growingbank in its category, in the Business Today-KPMG Survey of India’s bestbanks of 2007. This was the first year of participation in the survey.

Yes Bank received the “Best Corporate Social Responsibility Practice”award at the Social and Corporate Governance Awards 2007. Theseawards were instituted to recognize the need for new innovativestrategies to implement the CSR practice within the business focus ofthe Indian corporate sector.

Rana Kapoor, MD and CEO, Yes Bank received the distinguishedentrepreneurship Award at PHDCCI Annual Awards for Excellence2007.

Yes Bank received ‘The Most Improved Local Bank in Asian CurrencyBond’ and the ‘Salesperson in Asian Currency Bond’ at the AssetBenchmark Survey for significant contributions in debt capitalmarkets.

Yes Bank ranked #2 (upto $50 mn) and # 6 (upto $100 mn) in theThomson Financial Rating for Top Book Runners of Indian Rupee Bonds2007.

Yes Bank invited to be a founding member of the Community of GlobalGrowth Companies. Yes bank is the only Indian bank to have beenidentified by The Forum as one of India's growing organizations on theway to becoming a global industry leader.

Yes bank received the CEO with HR orientation award. The awards wereinstituted to recognize pursuit of excellence in HR across the IndianCorporate Sector.

Yes bank included as a Chairman’s Circle Member of USIBC enablingthe bank to participate in significant initiatives to enhance trade andinvestment opportunities between India and US/UK.

Source: Partial List adapted from www.yesbank.in and other sources

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Appendix 3Yes Bank’s Financial Highlights in 2010

INR Million Q2FY10 Q2FY09 % Growth H1FY10 H1FY09 % Growth

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 Expenses 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 and 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


Yes Bank’s Financial History

Advances

140,000

120,000

100,000

80,000

60,000

40,000

20,000

02003-05 2005-06 2006-07 2007-08 2008-09

124,031

94,303

62,897

24,071

7,160

INR MillionProfit After Tax

3,500

3,000

2,500

2,000

1,500

1,000

500

0

–50038

2003-05 2005-06 2006-07 2007-08 2008-09

3,038

2,000

944553

INR Million

Balance Sheet Deposits

Appendix 2

250,000

200,000

150,000

100,000

50,000

0

169,824

111,034

41,626

12,782

INR Million

2003-05 2005-06 2006-07 2007-08 2008-09

229,008

82,204

29,104

6,630

2005-06 2006-07 2007-08 2008-09

INR Million

2003-05

161,694

132,732

180,000

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

0


Balance Sheet Growth

September 30, 2009 September 30, 2008 % Growth

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


Appendix 3 (Cont.)

Yes Bank Consolidated Figures

FY 08 FY 07 FY 06 FY 05

Financial Leverage (x) 12.88 14.11 7.27 5.89

Capital Adequacy Ratio (%) 13.60 13.60 16.43 18.81

Gross NPA (%) 0.11 0.00 0.00 0.00

Net NPA (%) 0.09 0.00 0.00 0.00

Total Income ( cr) 1665.36 782.18 289.92 48.15

Interest Income ( cr) 1310.83 587.61 190.18 29.98

Net Interest Income ( cr) 336.72 171.35 85.47 28.13

Fee Income ( cr) 301.59 190.07 95.98 15.60

Net Interest Margin (%) 2.74 2.79 2.96 2.84

Interest Income/Total Assets (%) 7.72 5.29 4.57 2.35

Fee Income/Total Income (%) 18.11 24.30 33.04 32.40

Fee Income/Net Interest Income (%) 89.57 110.92 112.07 86.40

INR Million

Appendix 4

Business Segment

37%

Financial Markets

Transaction BankingFinancial Advisory

Others (3rd Party)Distribution, Retail Fees, etc.


7%

33%

23%

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Reference # 33J-2011-06-05-02

Business Segment

Appendix 4 (Cont.)FY 08 FY 07 FY 06 FY 05

Net Margin (%) 12.01 12.06 19.08 –7.81

Asset Turnover (x) 0.12 0.10 0.11 0.04

Return on Assets (%) 1.42 1.24 2.03 –0.29

Return on Equity (%) 18.34 17.44 14.78 –1.73

Cost Efficiency (%) 29.50 34.72 44.80 83.20

Historical Yearly Avg./Current Market Price ( ) 46.52 203.83 111.50 54.51

Book Value per Share ( ) 44.59 28.11 21.21 10.85

EPS Historial/TTM ( ) 9.71 3.37 2.05 –0.19

P/BV (x) 1.04 7.25 5.26 5.02

P/E Historical (TTM) (x) 4.76 60.48 54.42 –290.04

Source: Yes Bank Annual Reports; http://www.stock-picks-focus.com/yes-bank.html; Yahoo Finance Historical Price Data,TTM, EPS from India Earnings, CMP as on Mar 23, 2009.

Source: http://in.finance.yahoo.com/q/bc?s=YESBANK.NS&t=2y&1=on&z=1&q=1&c=%5EBSESN

Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.

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