The Banking and Strategy Initiative

Chillin' out till it needs to be funded

Banking: YES in the lead

YES Bank came for a quick $250m QIP gathering INR 1200 crores from the market today with J P Morgan, Capital Est and the Merchant Banker Morgan Stanley subscribing to the issue. 60% of the order book has been reported as finalised on UTV.

Yes Bank’s SME results indicate its bullishness on Infrastructure and Healthcare as well as Agri businesses. Yes Bank has decided to concentrate on smaller tickets and should thus not be leading credit mandates this year. At the current price of INR 272, the market is expecting a lot from this wunderkind.

The bank is going in for a capital raising even as its capital adequacy ratio as on December 31,2009 was at 16.19%. According to Yes Bank MD & CEO Rana Kapoor, “We are expanding at a fast pace. Our loan growth is 71% while our deposit growth has been 62.8%. We want to maintain a 45% CAGR for the next two years and 35% for the next three years thereafter.”

via ET – Earnings – Banks

Yes Bank has grown credit at 71% in the December Quarter and would target a CAGR of 45% for the next year, that would leave a lot of interest in the stock..but they need more interesting customers , with most expansion on hold and branch infrastructure costs rising without acces like PSB banks and even ICICI Bank, which is otherwise becoming a laggard in financial and retail banking market share performance

More results based deep dive will be available to compare apples and apples with HDFC Bank, ICICI, SBI and a few others like Axis, PNB, Kotak and Yes challenging the notion that the Indian Financial Services sector is primarily Dollar oriented right now.

MNC Banks like HSBC, Standard Chartered and Citibank each maintain a book of nearly Rs 100000 Crores and profits of nearly Rs 1000 Crores ( to order of magnitude)

On the Infrastructure side the IDFC Proj Eq Fund with $500 million has started investing in Toll Highways on its own , while ICICI Bank has the much touted relationship with Kamal Nath for over Rs 20 Crore a day in Roads..YES may soon come with some Dutch partners?

[Tag Banks, Indian Banking, Banking, Bank-stocks]
[Category India, Banking]


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