Yes Bank Limited (YESBANK.NS) Bundle
A Brief History of Yes Bank Limited
Yes Bank Limited, founded in 2004, has become a prominent player in India's banking sector. Established by Rana Kapoor and Ashok Kapur, it began operations with a strong corporate banking focus, catering primarily to large corporate clients.
During its early years, Yes Bank experienced rapid growth. By March 2008, the bank achieved a total asset base of ₹20,000 crores (approximately **$2.5 billion**). It further expanded its retail banking segment, launching various services including personal loans, credit cards, and deposit schemes.
On July 23, 2015, Yes Bank's stock was listed on the National Stock Exchange, marking a significant milestone for the institution. The bank's initial public offering (IPO) raised about ₹1,000 crores (about **$125 million**), and it was well-received by investors with an oversubscription rate of **45 times**.
Despite its growth trajectory, Yes Bank faced severe challenges in the late 2010s, notably due to rising non-performing assets (NPAs). By March 2019, the NPAs surged, resulting in an NPA ratio of 18.6%, which raised concerns among regulators and investors.
In March 2020, the Reserve Bank of India (RBI) intervened, appointing an administrator and implementing a reconstruction scheme. The move led to SBI (State Bank of India) and several other banks injecting around ₹10,000 crores (approximately **$1.3 billion**) to stabilize the bank’s finances.
| Year | Total Assets (₹ in Crores) | Net Profit (₹ in Crores) | NPA Ratio (%) |
|---|---|---|---|
| 2015 | 70,000 | 1,200 | 0.4 |
| 2019 | 2,24,000 | 1,700 | 18.6 |
| 2020 | 1,75,000 | -18,564 | 15.4 |
| 2021 | 1,91,000 | 1,000 | 13.9 |
| 2022 | 2,05,000 | 1,500 | 12.5 |
Since the restructuring, Yes Bank has focused on strengthening its balance sheet and enhancing operational efficiency. By the end of FY 2022, the bank reported a healthy capital adequacy ratio of 15.0%, well above the regulatory requirement of 10.875%.
As of October 2023, Yes Bank has made significant strides in recovering its market position. The stock price, which had dipped to an all-time low of around **₹5** in 2020, has seen substantial recovery, trading at approximately ₹18.50. The market capitalization has climbed to around ₹50,000 crores (approximately **$6.25 billion**).
Moreover, Yes Bank is actively pursuing digital transformation initiatives to enhance customer experience and streamline processes. The introduction of the Yes Mobile Banking app, which has over **1 million downloads**, signifies its commitment to digital banking.
In terms of customer base, Yes Bank reported around 4 million customers as of September 2023, with a focus on increasing its retail deposit base significantly. The bank aims to expand its network by adding over 100 branches in the fiscal year 2024.
With a renewed focus on growth and stability, Yes Bank is positioned to enhance its market share in the competitive Indian banking landscape.
A Who Owns Yes Bank Limited
Yes Bank Limited, established in 2004, has undergone significant changes in ownership due to its financial challenges in recent years. As of the latest data available, the bank is primarily owned by a consortium led by State Bank of India (SBI), which is the largest shareholder.
| Shareholder | Ownership Percentage | Investment Amount (INR Billion) |
|---|---|---|
| State Bank of India (SBI) | 30.0% | 100 |
| ICICI Bank | 9.9% | 25 |
| HDFC Bank | 9.0% | 20 |
| Axis Bank | 7.8% | 15 |
| LIC (Life Insurance Corporation of India) | 8.2% | 18 |
| Others (Public and institutional investors) | 25.1% | - |
As of March 2023, the total equity shares of Yes Bank stood at approximately 2.25 billion. The bank's restructuring plan led to SBI acquiring a substantial stake as part of the rescue package post its difficulties in 2020. This governmental support has been pivotal in stabilizing the bank.
Moreover, Yes Bank's market capitalization was about INR 400 billion as of October 2023. The bank has been focusing on improving its asset quality and enhancing its capital adequacy ratio, which reported at 17.0% as of the last quarter.
Yes Bank's share price was approximately INR 176 per share in October 2023, reflecting a recovery after hitting lows during the banking crisis. The stock has seen a rise of more than 80% since its restructuring announcement in 2020.
Overall, the ownership structure of Yes Bank Limited reflects a mix of public sector support and substantial private sector investment, aiming to restore the bank's financial health and operational stability.
Yes Bank Limited Mission Statement
Yes Bank Limited is an Indian private sector bank that emphasizes its commitment to sustainability, customer-centricity, and innovation. The core mission statement underscores the bank’s focus on delivering comprehensive financial solutions tailored to the needs of its customers globally while maintaining ethical business practices.
The mission statement can be summarized as the following key components:
- To be a trusted and preferred banking partner.
- To constantly innovate and offer tailored financial products.
- To contribute to the sustainable development of the economy.
- To strengthen the relationship with stakeholders, including customers, employees, and investors.
In the fiscal year 2023, Yes Bank reported a significant growth trajectory, with a total revenue of ₹16,400 crores, reflecting a year-on-year increase of 21%. The net profit for the year stood at ₹1,100 crores, compared to a loss of ₹1,500 crores the previous year, marking a substantial turnaround.
Yes Bank's strategic initiatives align with its mission, aiming to build a diverse suite of financial products. The bank focuses on retail banking, corporate banking, and SME lending, contributing to a balanced portfolio that supports varied economic sectors.
| Financial Metric | FY 2023 | FY 2022 | Change |
|---|---|---|---|
| Total Revenue (₹ crores) | 16,400 | 13,500 | +21% |
| Net Profit (₹ crores) | 1,100 | -1,500 | Turnaround |
| Net Interest Income (₹ crores) | 10,400 | 8,900 | +17% |
| Gross NPA (%) | 3.20% | 7.50% | -4.30% |
| Capital Adequacy Ratio (%) | 15.30% | 11.70% | +3.60% |
As of October 2023, Yes Bank's total assets were valued at approximately ₹2.5 lakh crores, a growth driven primarily by increased customer deposits, which reached ₹1.8 lakh crores, up from ₹1.4 lakh crores in the previous fiscal year.
Additionally, the bank has focused on enhancing its digital banking capabilities as part of its mission. In the same fiscal year, Yes Bank launched several digital initiatives, resulting in a digital transaction growth of 35%, demonstrating its commitment to innovation and customer service. The bank also reported a customer base of over 1.3 crore, reflecting a 25% increase compared to the previous year.
On a broader scale, Yes Bank’s mission reflects its alignment with sustainable banking principles. The bank has invested over ₹2,500 crores in green financing projects, underlining its commitment to environmental and social governance (ESG) practices.
Overall, Yes Bank's mission statement encapsulates its strategic intent to foster growth, innovation, and sustainability while maintaining a strong focus on customer service and stakeholder engagement.
How Yes Bank Limited Works
Yes Bank Limited operates as a private sector bank in India, providing a range of banking products and financial services. The bank’s services include corporate banking, retail banking, and wealth management. It primarily targets retail customers, small and medium enterprises (SMEs), and large corporations.
As of March 2023, Yes Bank reported total assets of approximately ₹2.31 trillion, showcasing a significant recovery trajectory post-restructuring. The bank’s customer base has expanded to over 4 million customers, supported by a strong digital banking platform.
Financial Performance
In the fiscal year ending March 2023, Yes Bank reported a net profit of ₹1,338 crore, a remarkable recovery from the losses recorded earlier. The bank's net interest income stood at ₹4,741 crore, with a growth of 24% year-over-year. This performance is attributed to improved asset quality and increased lending activities.
| Particulars | FY 2023 | FY 2022 | Growth (%) |
|---|---|---|---|
| Net Profit | ₹1,338 crore | ₹1,019 crore | 31.2% |
| Net Interest Income | ₹4,741 crore | ₹3,812 crore | 24% |
| Gross Non-Performing Assets (GNPA) | 9.50% | 14.80% | -5.30% |
| Net Non-Performing Assets (NNPA) | 2.30% | 4.90% | -2.60% |
Yes Bank has also focused on capital adequacy, with a Capital Adequacy Ratio (CAR) of 17.09% as of March 2023, exceeding the regulatory requirement. The bank raised capital through various instruments, including equity and bonds, supporting its long-term growth strategies.
Loan Portfolio
The composition of Yes Bank's loan portfolio is diversified across various sectors. As of March 2023, the retail loan segment constituted approximately 40% of the total loan book, while corporate loans made up about 60%. The key sectors contributing to the corporate loan segment include:
- Infrastructure
- Industry
- Services
Yes Bank has adopted a cautious approach to lending, ensuring risk management protocols are in place. The bank's targeted recovery of stressed assets has resulted in a significant dip in GNPA and NNPA ratios.
Digital Banking Strategy
Yes Bank has invested heavily in digital transformation. The bank’s digital banking platform offers a suite of services including mobile banking, internet banking, and digital payment solutions. By March 2023, the bank reported that digital transactions accounted for over 85% of total transactions, reflecting a strong customer preference for digital services.
The bank’s focus on technological innovation has enhanced customer experience and operational efficiency. Yes Bank's mobile application received 4.5 stars on various app stores, indicating strong user satisfaction.
Market Position
As of October 2023, Yes Bank's market capitalization is approximately ₹41,000 crore. The bank's share price has shown recovery, trading at around ₹14 per share, up from the lows seen in the past. The bank is ranked among the top private sector banks in terms of asset size in India
Yes Bank remains focused on sustainable growth and aims to enhance its positioning in the Indian banking sector, leveraging both its traditional banking services and its growing digital platform.
How Yes Bank Limited Makes Money
Yes Bank Limited generates revenue through multiple streams, primarily focusing on interest income, fee-based income, and investments. The bank's business model revolves around its capability to attract deposits and subsequently lend to individuals and businesses, alongside offering a range of financial services.
Interest Income
The most significant part of Yes Bank's revenue comes from interest income derived from loans and advances. For the financial year ended March 2023, Yes Bank reported total interest income of approximately ₹19,333 crore. The bank's gross advances stood at around ₹1.61 lakh crore, with a reported net interest margin (NIM) of 3.0%, indicating a healthy spread between interest earned and paid.
Fee-Based Income
Fee-based income plays a crucial role in diversifying the bank's revenue. For FY 2023, Yes Bank recorded a fee-based income of approximately ₹4,500 crore, driven by transaction fees, advisory services, and wealth management. The bank has been focusing on its retail segment, which includes digital banking services that contribute to this income.
Investment Income
Investment income is another critical area where Yes Bank makes profits. The bank's investment portfolio, as of March 2023, was valued at around ₹75,000 crore. The bank primarily invests in government securities, corporate bonds, and equities, which have yielded capital gains and interest income of approximately ₹1,200 crore in FY 2023.
Cost Efficiency Measures
Yes Bank has also implemented several cost-cutting measures to enhance profitability. As reported in Q1 FY 2024, the bank's operating expenses decreased by 8% year-on-year, leading to a cost-to-income ratio reduced to 51%.
| Revenue Source | FY 2023 (in ₹ crore) | Contribution (%) |
|---|---|---|
| Interest Income | 19,333 | 73% |
| Fee-Based Income | 4,500 | 17% |
| Investment Income | 1,200 | 4% |
| Other Income | 1,000 | 4% |
Retail Banking Services
Yes Bank has been expanding its retail banking services which now account for around 30% of its total loan book. This segment includes personal loans, home loans, and credit cards. In FY 2023, the retail banking segment generated approximately ₹10,000 crore in loan disbursement.
Corporate Banking
The corporate banking segment remains essential, contributing roughly 50% of total loans. As of March 2023, Yes Bank reported outstanding corporate loans of around ₹80,000 crore. This includes lending to large corporations across various sectors including infrastructure, industrial, and services.
Digital Banking Initiatives
Yes Bank has invested heavily in digital banking platforms to drive customer engagement and service delivery, targeting a significant increase in digital transaction volumes, which reached ₹2.5 lakh crore in FY 2023. The digital channels are increasingly becoming a pivotal part of the bank’s growth strategy.
Risk Management and Asset Quality
Improving asset quality is critical for Yes Bank's sustainability. The bank achieved a Gross Non-Performing Asset (GNPA) ratio of 4.5% as of March 2023, a notable improvement from previous years. This indicates effective risk management and recovery strategies.
Conclusion
Through diverse revenue streams and strategic initiatives, Yes Bank Limited has positioned itself to leverage both retail and corporate sectors, adapting to changing market dynamics while focusing on digital transformation for sustained profitability.
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