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YES Bank announces Q1 FY10 Results: Total Net income for Q1FY10 up 67% to Rs. 308.9 crore; Net Profit up 84% to Rs. 100.1 crore

The Board of Directors of YES BANK Ltd. took on record the un-audited Q1FY10 results at its meeting held in Mumbai on July 21, 2009.

Commenting on the results and financial performance, Rana Kapoor, Managing Director & CEO, YES BANK said, “This quarter has evidenced a stellar financial performance through meaningful contribution from all revenue streams, strong asset quality and sustained growth momentum. We are further accelerating our Branch Banking business through our integrated SME and retail model, focusing on deposit mobilization, cash management services and distribution of products, while continuing to garner significant momentum across various corporate banking segments. The Bank plans to hire more than 900 people in this fiscal. Increased investments in Human Capital, state-of-the-art physical infrastructure and scalable technology platforms along with sustained growth momentum in earnings has positioned the Bank to fully capture the growth opportunity”

Q1FY10 Performance highlights

• Sustainable Net Interest Income (NII): Net Interest Income (NII) for Q1FY10 was up 45% to Rs. 163.7 crore as compared to Rs. 113.0 crore for Q1FY09 on account of a steady growth in advances & investments and improving Net Interest Margin (NIM). Net Interest Margin (NIM) for Q1FY10 was 3.1% as compared to 2.9% in Q1FY09. The Bank witnessed significant reduction in cost of funds due to relatively large proportion of interest sensitive liabilities getting re-priced. While Gross yield on advances for Q1FY10 increased to 12.5% (11.6% in Q1FY09), cost of funding dropped to 8.1% (8.4% in Q1FY09) during the same period.

• Steady growth in Advances, Investments and Deposits: Total Advances grew by 26% to Rs. 12,671 crore as at Jun 30, 2009 from Rs. 10,052 crore as at Jun 30, 2008. Investments grew by 26% to Rs. 6,409 crore as at Jun 30, 2009 from Rs. 5,071 crore as at Jun 30, 2008. Total Deposits grew by 22% to Rs. 15,342 crore as at Jun 30, 2009 from Rs. 12,552 crore as at Jun 30, 2008. Current and Savings Account deposits grew by 30% while Term Deposits grew by 22% over the same period. The Bank’s Balance Sheet grew by 25% to Rs 21,669 crore as at Jun 30, 2009 from Rs 17,390 crore as at Jun 30, 2008. Break-up of the total non-Priority Sector Lending as at Jun 30, 2009 was as follows - Wholesale Banking (64.7%), Commercial Banking (29.7%), Business Banking - SME (4.7%) and Retail (including small business loans, 0.9%).

• Resilient Non Interest Income streams: Non-interest income (Transaction Banking, Financial Markets, Financial Advisory and 3rd party distribution & retail fees) constituted 47% of total net income in Q1FY10 compared to 39% in Q1FY09. This income stream grew 103% to 145.2 crore compared to Rs. 71.5 crore in Q1FY09. Non interest income consists of Financial Markets income of Rs 85.0 crore, Financial Advisory income of Rs. 25.3 crore, Transactional Banking of Rs. 25.0 crore and 3rd party distribution and Retail fee accounted for the balance Rs. 9.9 crore.

• Healthy growth in operating/net profits: Operating profit for Q1FY10 was up 116% to Rs. 197.8 crore as compared to Rs. 91.4 crore for Q1FY09 driven primarily by sustained revenue growth from multiple revenue streams and declining cost to income ratio (36% in Q1FY10 versus 45% in Q1FY09). Profit after tax for Q1FY10 was up 84% at Rs. 100.1 crore as compared to Rs. 54.3 crore for Q1FY09.

• Healthy Asset Quality: Gross Non-Performing Assets as a proportion of Gross advances was at 0.48% while Net Non Performing Assets as a proportion of Net advances was at 0.24% as at Jun 30, 2009 (0.68% and 0.33% respectively as at Mar 31, 2009). Bank’s total loan loss coverage ratio was at 178% while specific provisioning cover was at 51% as at Jun 30, 2009. Bank restructured Rs. 61.4 crore of advances during the quarter which constituted 0.48% of the Gross advances as at Jun 30, 2009. Total restructured advances were Rs. 119.7 crore as at Jun 30, 2009 which constituted 0.94% of the Gross Advances as at Jun 30, 2009.

• Well capitalized for growth: Tier I Capital at 10.28% and total capital adequacy of 17.63% as at Jun 30, 2009 provides significant headroom for growth.

• Strong Shareholders’ returns: RoE of 23.9%(annualized) and RoA of 1.80%(annualized) for the quarter consistently continue to be amongst the highest in the Banking industry. • Efficient cost control: Continued management focus on cost control resulted in Cost to Income ratio of 36% in Q1FY10 compared to 45% in Q1FY09; amongst the lowest in the Banking industry.

Business Highlights

Awards & Recognitions

• YES BANK received the Enterprises Driving Growth and Excellence (EDGE) award in the General IT category for its Contact Centre application. EDGE is an initiative by Network Computing to identify, recognize and honor end-user companies in India that have demonstrated the best use of technology to solve a business problem, improve business competitiveness, and deliver quantifiable ROI to stakeholders.

Branch Banking

• YES BANK believes in an ‘integrated approach’ to banking, which through its branches not only provides ease of transaction but also engages, informs and involves with the customer in a personalized manner thereby providing incremental value for the time spent inside the branch. The customers are served through an extensive branch network, comprising 123 branches in 97 locations across India as well as 93 off-site ATMs in Mumbai, Pune and the NCR region, and two National Operating Centres in Mumbai and Gurgaon presently.

• YES BANK has entered into a strategic alliance with First Data, a global leader in electronic commerce and payment processing services, to introduce the concept of ‘Convenience ATMs’ to the Indian market, and offer an innovative ATM deployment programme. The teams will jointly establish a widespread network of Automated Teller Machines (ATMs) across various cities in India around YES Bank branches. The Bank will expand its network to 500 ATMs by 2010, 1500 by 2012 and, over 3,000 ATMs by 2015.

Knowledge Banking

• YES BANK in association with Business Today introduced the first ‘Business Today SME Survey & Awards 2009’ in April 2009. The objective of this survey was to bring together growth-focused, innovative and success-driven SME enterprises on a common platform for inspiring an entrepreneurial spirit across the SME sectors.

• YES BANK was the only financial institution to be invited to participate in a workshop on Metropolitan Agriculture: Indo-Dutch Solutions for Africa during the Africa Agribusiness Forum 2009 held in Cape Town, South Africa from June 14-17, 2009. The topics of discussion were Changing Economic Outlook – Implications of Agriculture in Africa and Agro Food Parks in Metropolitan Areas.

• YES BANK and Hindu Business Line have partnered to jointly introduce a co-branded Food & Agribusiness page. The objective of this knowledge partnership is to create a knowledge centre for the sector showcasing thought leadership in the Food and Agribusiness sector. Financial Advisory & Corporate Finance

• YES BANK successfully syndicated long term project finance of Rs. 5 billion for the 1250 bed Medicity Super specialty Tertiary Care Hospital, promoted by the noted cardiac surgeon, Dr. Naresh Trehan.

• YES BANK was the Exclusive Advisor to Vétoquinol, a French veterinary care company for the acquisition of the animal health division of Wockhardt Limited.

• YES BANK was the Sole Advisor to a subsidiary of Suzlon Energy Ltd. for the acquisition of last tranche of Martifer’s shareholding in REPower Systems AG for Euro 175 million. Responsible Banking

• YES BANK sponsored the FICCI – SOAK initiative to build sustainable infrastructure for Mumbai.

• YES BANK in partnership with Learning Links Foundation, a non-profit organization, has introduced the Financial Education Program that will further educate and empower young students in making informed decisions in the area of personal financial management. This program will be implemented across 1000 schools in rural and urban India.

(This is a press release from Yes Bank)