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Thursday, 21 April 2011

Yes Bank - Stellar Performance & Stupidity rolled into one!!

First the stellar performance:

Highlights for Full Year ended Mar 31, 2011 (FY11)
  • Net Profit up 52.2% to 727.1 cr (477.7 cr in FY10)
  • Net Interest Income up 58.2% to 1,246.9 cr (788.0 cr in FY10)
  • Operating Profit up 37.9% to 1,190.4 cr (863.3 cr in FY10)
  • Net Interest Margin at 2.9% 
  • Return on Average Assets-RoA of 1.5%; RoA has been at or above 1.5% over the past 3 years
  • Return on Equity-RoE of 21.1%; has been 20% or above over past 3 years
  • Basic EPS of  21.1 and Diluted EPS of 20.2
Other Key Highlights as at Mar 31, 2011
  • Advances up 54.8%
  • Deposits up 71.4%
  • Total Assets up 62.2%
  • Basel II Capital Adequacy Ratio of 16.5% (Tier I – 9 .7%)
  • Gross NPA at 0.23% of Gross Advances 
  • Net NPA at 0.03% of Net Advances 
  • Book value per share of 109.3 (91.0 as at Mar 31, 2010)
Now, the stupidity:

Yes Bank made 2 announcements - 1) dividend of 2.5/share (approximately 85 crores) and 2) it has plans to raise up to USD 500 million (about Rs 2,000 crore) during the current fiscal to fund business growth . 

These two announcements, to my mind, are contradictory in nature. Why does a company earning 20% RoE growing at over 40% need to pay a dividend? Specially, if it needs to raise equity capital in the near future. Beats me.

Bottomline: Great bank, keep buying on dips.

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