India Earnings Season: YES Bank grows up by an inch

Though  maintaining the secular 30% year on year growth, ticker reports on Yes Bank are easily being ignored as the market avoids falling knives and looks to “settling this global correlation thing once and for all”

Global correlation is at its best currently as deep crises underscore investors’ limited options and the interest quotient of the markets including banking is at an all time low, even as consumption plays have lost a lot of innovation quotient amd purses unfortunately have lost a lot of disposable coefficient.

Still From INR 355 crores in june, YES Bank has moved to a NII of INR 385 crores for the quarter or $77mln compared to $71mln and maintaining a healthy 12.7% growth in Advances year on year and 10% in Deposits. The Bank’s CASA remains a challenge at 12% (11.7%)  The year on year comparisons though are pretty ineffective and more of concern is that QOQ growth is nearly 10% on an albeit small base Fee income for the bank for example has almost doubled to INR 233 crores over September 2010 ($46.6mln) thus the topline for the bank is a comfortable $123.6 mln on the new rupee dollar levels with the dollar poised to get only stronger in the holiday season and then some

At a eighth of HDFC bank’s NII, the bank has covered a lot of ground in profitability with its Gross NPA levels even a fifth of HDFC bank’s low levels. At $0.75 mln in provisions, the Net NPAs of 0.04% showcase the banks patience in managing the Tier I 16% CAR balance sheet 

Net Profit increased from a high 216crs (40% yoy growth ) in Q1 on a 8% QOQ increase to INR 233 crores or $48.2mln

With a Market Cap of $2bln the bank can likely ramp up to its peers like Kotak and cross market Cap to $5 bln given its advantages over new entrants and strategic niches derived from Financial and operating efficiencies based on these results.