The financial markets generate a lot of number on a per second basis. There are people who have made it a profession to convert this information into trends, buy-sell signals, charts and pivot tables. Over the last 18 years of financial journalism, I have realised that every number has a story to tell. And these numbers as a trend normally never lie. I am forever looking for these trends.
Private sector lender Yes Bank saw its total net income and net profits go up significantly for the year ended March 31, 2016. While total net income rose 31.5 percent to Rs 7,278.9 crore, the net profit of the bank clocked a 26.6 percent growth to touch Rs 2,539.4 crore. CASA growth for the period stood at 48.7 percent to Rs 31,342.8 crore. The bank’s earnings per share (EPS) went up 22.9 percent to Rs 60.60. In general, these results were way above analyst forecasts.
Yes Bank is one of the rare Indian banks that has managed to grow at a high rate when the banking system itself is not in the best of health. Banks in general, and PSU banks in particular, have seen their non-performing assets (NPAs) rise due to problems related to the industry as well as the quality of promoters.
The gross NPA of Yes Bank has risen marginally to 0.76 percent for the year ended March 31, 2016, as against 0.66 percent in the previous year. “The bank has managed to maintain low NPAs on account of superior risk management practices and has been careful in its lending practices,” said Rana Kapoor, managing director & CEO, Yes Bank. Low NPAs have also led to lower credit costs of 50 basis points.
NPAs across India’s banking system are rising. According to a September 2015 report by the Reserve Bank of India, the amount of NPAs as on March 2015 stood at 4.62 percent of the gross advances of banks, compared with 2.36 percent as of March 2011. The growth in NPAs was much higher than the growth in advances during the last four years. In addition, the ratio of restructured standard assets to gross advances grew to 6.44 percent at the end of March 2015 from 5.87 percent of gross advances as on March 2014. Overall, the quality of advances has been a concern for most banks over the last two years.
The total advances for Yes Bank grew 30 percent for the year ended March 31, 2016. Corporate banking accounted for 65.1 percent of the advances portfolio and retail and business banking worked out to 34.9 percent where micro and small enterprises segment grew by 13 percent and consumer banking by 10.8 percent.
Over the last one year the stock price of Yes Bank has moved up by 12 percent at a time when the Bank Nifty (an index which comprises of both PSU and private banks) has fallen by 4.31 percent. The stock closed at Rs 915.5 on NSE on Wednesday with a market capitalisation of Rs 38,524 crore.