YES BANK Sea Change in Regulations & Opportunities. Edelweiss Conference Tuesday, February 7,2012

Transcription

1 YES BANK Sea Change in Regulations & Opportunities Edelweiss Conference Tuesday, February 7,2012

2 Agenda Version 1.0 Setting up the Foundation Version 2.0 : FY Liability Franchise Diversification Regulatory Developments Diversification of Assets HCM - The Professionals Bank of India 2

3 YES BANK A Differentiated Approach Professional Entrepreneurship Owner Manager Partner Model Customer Centric Approach Superior structuring capabilities leading to client focused solutions Knowledge Banking Focus on sunrise sectors of the Indian economy Segmentation brings out higher focus Creative Technology Delivering of world-class banking solutions Outsourced model enhancing scalability Cutting edge features driving Retail Service Excellence Superior & Customized products & services Responsible Banking Mainstream sustainability within its business focus Triple Bottom-Line ethos of People, Planet and Profit 3

4 ` Millions ` Millions ` Millions Consistent Financial Performance from inception 300, , , , ,000 50,000 74% CAGR in Advances & Deposits Generating superior Shareholder Returns Advances Deposit 60,000 50,000 40,000 30,000 20,000 10,000 Shareholder funds Capital Funds RoE 25% 20% 15% 10% 5% - FY06 FY07 FY08 FY09 FY10 - FY06 FY07 FY08 FY09 FY10 0% Resulting in Consistent Income streams with high profitability 16,000 Net Interest Income Non Interest Income Net Profit 4,777 14,000 12,000 3,038 10,000 8,000 2,000 6,000 4, ,000 - FY06 FY07 FY08 FY09 FY10 CAGR FY 06 - FY 10 Net Interest Income 74% Non Interest Income 55% Net Profit 71% Share holders funds 53% STEADY GROWTH & CONSISTENT PERFORMANCE ACROSS A CYCLE SETTING UP A STRONG PLATFORM 4

5 Version 2.0 at YES BANK Version 2.0 -Vision & Strategy for Next Growth Phase of YES BANK ( ) Unveiled on April 29, 2010 to external stakeholders Characterized by : o Focus on achieving Scale o Focus on achieving Revenues, Risk & Liabilities Diversity o Through knowledge driven, segmental and relationship driven strategies Granular Liabilities Generation is the #1 Priority of the Bank o Superior Customer Service & Brand Management o Finest Human Capital Management VERSION 2.0 SCALABILITY, DIVERSITY & SUSTAINABLE GROWTH 5

6 Version 2.0 Key Parameters (5 Years) 12,000 employees The Professionals Bank of India 750 Branches 3000 ATMs Advances ` 1,000 bn. Deposit base ` 1,250 bn. Balance Sheet ` 1,500 bn. Target RoE : 22-24% Target RoA : % EVOLVE AS THE BEST QULAITY BANK OF THE WORLD IN INDIA BY

7 Diversification Liabilities Management CASA, 10% FY 10 Q3 FY 12 FY 15 38% CAGR Reqd. CAGR 35% ` billion ` billion ` 1,250.0 billion CD, 17% CASA, 13% CD, 12% CASA, 30% CD, 8% R-Deposits, 26% Breposits, 11% R-Deposits, 58% R- Deposits, 62% Br - Deposits, 18% *R Deposits Relationship Corporate Deposits; Br. Deposits: Branch Deposits; CD: Certificate of Deposit Br-Deposits, 36% FY 2010 FY 2015 Target Growth rate of 36% Branch Banking Granular FDs experienced growth of 101% during FY 2011; 40% YTD growth as of December 31, 2011 Granular Deposits (CASA + Branch Banking FDs) up from 22% of Total Deposits as of March 31, 2010 to 31% as of December 31, 2011 Successful rundown of CDs (from 17% to 12%) & by creating increased reliance on granular deposits Saving Account deposits have 90% CAGR and Current Accounts have 46% CAGR over 7 quarters 7

8 Regulatory Reforms Deregulation of Savings Rate Deregulation of NR Rates Bank Branch Authorization Saving Account Rates deregulated from Oct 25, 2011 Effective Transmission of Monetary Policy Banks will have a greater scope for product and service innovations and cross-selling Acceleration of financial inclusion of un-banked augmenting savings propensity SA number portability could further accelerate account acquisition Interest Rate on NRE SA and Term Deposits have been deregulated Opportunity of NRI customers to leverage on the higher interest rate environment, thereby improving Fx inflows Opportunity for new entrants to acquire NRI customers Government Agency Business Arrangement Opening of Branches in Tier II to Tier VI cities has been deregulated More flexibility to target small retail customer in rural and semi-urban areas, where the ratio of savings bank deposits-to-total deposits is as high as % Branch Network critical to accretion of SA Private Sector Banks are authorized to handle Central/ State Government Business at par with PSUs Opportunity to attract Payment & Collection Mandates from Central/ State Government Agencies including Direct Tax Collections, Tax Refund Payments, Pension Payments, Commercial/ Sales Tax Collections for various States etc. leading to CA/ SA spin-off potential Huge Opportunity for nimble Banks with Customer Centric focus 8

9 Opportunity with SA Migration - Large PSU Banks Market Share Deposits 49% % of SA 28% Approx NIM Impact (2% increase in SA) - 56 bps - Large Private Sector Banks 12% 27% - 54 bps - Large Foreign Banks 5% 21% - 42 bps - Medium Private Sector Banks 2% 7% - 14 bps 1 % of SA Deposits Migration from Large Banks to Medium Sector Banks ` 341 billion Market Share Deposits % of SA - Medium Private Sector Banks 2.8% 25-28% Huge Opportunity for YES BANK to capture without disrupting Larger Players 9

10 YES BANK CASA & Branch Deposits take-off has commenced Branch Banking Deposits CASA 10% 11% 10% 13% 11% 13% 18% 18% FY10 FY11 Q2 FY12 Q3 FY12 Branches Strategy for FY Rapid branch network expansion with increased focus on increasing density B2B2C to be complemented by B2C Corporate Salary Accounts, YES FIRST (OPDT) strategy Ramping up NRI Banking Strategy YES VIJAY Salary Account offering for Defense Personnel (Indian Army) Gold Distribution/ Prepaid Cards to improve Retail Proposition Resulting in 17% increase in average SA balance in just 2 months post SA deregulation SA account acquisition rate increase by 3X between Oct to Jan X growth seen in NRI SA acquisition since December 2011 Increased traction seen since SA & NRI deregulation through galvanization of sales staff and product differentiation 10

11 Diversification of Advances CB, 21% FY 10 32% CAGR Q3 FY 12 Reqd. CAGR 37% FY 15 ` billion ` billion ` 1,000 billion BrB, 5% BrB, 15% C & IB, 63% BrB, 30% C & IB, 40% C & IB, 74% CB, 22% CB, 30% *C&IB: Corporate & Institutional Banking; CB: Commercial Banking; BrB: Branch Banking FY 2010 FY 2015 Target Growth rate of 35% Branch Banking (SME + Retail) mix improved from 5% in FY 2010 to 15% in Q3 FY 2012 Increased focus on SME & Retail Banking leading to diversification of business & risks, improved cross sell potential Introduction of Retail Products in Q3 FY12 Auto Loan Commercial Vehicle Financing Home Loan in partnership with a leading housing finance company Inventory Funding/ Small Business Loans Loan Against Property Loan Against Shares Rapid Customer acquisition enables significant cross-sell for Fee & Asset Products 11

12 The Professionals Bank of India Human Capital Strategy Flat Organization Structure ( 5 levels) Ethos of Owner Partner Manager Flagship Programs at YES BANK to Hire, Train and Retain Talent USRM University & School Relations Mgmt. YPEP YES Professional Entrepreneurship Program YES SCHOOL OF BANKING(YSB) YES Personality/ YES Mentor FY 11 YES BANK is the Preferred Employer of Choice at Top B-Schools in India 171 students from Top B-Schools Total: 5,013 Top: 45 Senior: 194 Middle: 1,189 Junior: 1,503 General: 2,082 FY10 Q3 FY YES BANK BUSINESS WORLD Transformation Series 2.0 Business Case Study Challenge for B-School Students in India & abroad Young Entrepreneurship Awards Key Strengths Execution & Project Management Skills Average Age 28 years; Headcount increase of 1,979 in FY & Q1 FY12 Wealth creation through best in class ESOPs program Talent acquisition from Peer Private Sector & MNC Banks ABILITY TO ACHIEVE SCALE IN VERSION

13 THANK YOU! 13