Bank Results Season: India Earning Surprise:(Flash) Yes Bank Grows Lending Income By 37%

Yes Bank grew NII by 37% over last year in the latest quarter, a high number eve for smaller nimble banks as BoB reported struggling with 3.23% NIMs in the same quarter. With frequent Tier I and Tier II QIPs, the Bank’s Capital has hit 17.5% and Tier I Capital is also high enough to load even higher growth digits as Gross and Net NPAs fall off from already minscule levesl to 0.24% and 0.06% Net Profit is INR 3.06 B the jump of 30% over year also translating into healthy linked/sequential growth

Of course with banks like ING Vysya almost degrowing the Loan assets , static at around INR 300 B and PSE Banks growing NPAs to significant 1% levels at the best of breed banks, the room at the top is definitely available for anothe top notch bank from the 2000-04 ‘era’ to make an impact when new banks with existing lending books and rural branches join the club in a few months

UCO Bank may have disappointed but PSE banks have shown that the markets do not expect more than 20% Sales growth tat best of breed banks and a growth in the range of 40% matched by growing Other income does hand the challenge to established lackeys at Kotak or the survivors at PNB at the bigger accounts as MNC banks also struggle with financing the Global Indian Corporation and India’s trade grows to 3 times the current levels in the coming decade.

BTW, apart from auctions for ECB lenders to quotas for buying bonds in FII acocunts which grew the possibility to OINR 250 B RBI also lent INR 77000 Crores or INR 770 B in today’s one/ten year auction

NPAs from the Deccan Chronicle account may be t o the tune of another INR 1 B at the bank but are unlikely to pressure the balance sheet.

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