Yes Bank bank share

For instance, net non-performing assets (NPAs) formed just 0.04% of net advances at the end of June quarter against 0.24% in the same quarter last year. This is commendable, given that most banks strive to maintain net NPAs below 1% of advances. While Indian banks operate at a return on assets (RoA) of around 1% on an average, YES Bank reported 1.6% RoA in the June quarter. This shows that it is one of the best banks in terms of utilisation of assets.

Though it seems difficult for the bank to repeat the advances growth seen in the June quarter, it has a proven track record of outgrowing its industry. A very high asset quality will help it in pressing the lending accelerators in an improving economic scenario.

Taking a cue from its financial performance, the bank’s stock has outperformed the Sensex in the past three months. The robust current quarter results will further strengthen investors’ confidence in the bank.

Yes Bank: High asset quality to drive lending growth (updated - 22 July 2010)
Yes Bank reported the highest ever quarterly net profit in the June 2010 quarter.

With the latest set of numbers, it has reaffirmed its status as one of the fastest-growing banks in the country. Earlier in the month, IndusInd Bank, too, reported high-growth numbers. Investors should draw comfort from the fact that new-age banks are performing well, as this gives them a chance to diversify their portfolio.

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YES Bank’s net profit growth was driven by a 107% year-on-year growth in advances. Needless to say that the bank outgrew its industry. However, the extent of outperformance was much more in the current quarter. The spurt in advances growth was partly due to the low base in the corresponding period last year and partly due to strong demand for funds from the telecom sector for the 3G and broadband wireless access. Though, the bank may not be able to repeat such a show in advances, the management has indicated that it aims to grow at twice the industry rate, going forward in this financial year.

While the bank grew its low-cost current account and savings account (CASA) deposits by 119%, the share of CASA in total deposits was only 10.5%. It is interesting to note that even without a high share of low-cost deposits, the bank has managed to maintain its net interest margin (NIM) at 3.1% in the June 2010 quarter. It has reported NIMs in excess of 3% consistently for the past six quarters. Very few Indian banks have been able to achieve this feat. YES Bank has continuously improved its asset quality.