YES BANK 2022-23 Annual Report Analysis

Mon, 17 Jul

YES BANK has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the bank during the year 2022-23.

YES BANK Income Statement Analysis

• Interest income during the year rose 19.4% on a year-on-year (YoY) basis.
• Interest expenses were up by 18.1% YoY during the same period.
• Operating expenses increased by 26.4% YoY during the year.
• The bank's net interest income (NII) increased by 21.8% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 2.8% in FY23 as against 2.8% in FY22.
• Other income increased by 21.1% YoY during the year.
• Net profit for the year declined by 30.8% YoY.
• Net profit margins during the year declined to 3.2% in FY23 from 5.6% in FY22.

YES BANK Income Statement – 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Interest Income	Rs m	190,188	227,022	19.4%
Other Income	Rs m	34,048	41,246	21.1%
Interest Expense	Rs m	125,284	147,998	18.1%
Net Interest Income	Rs m	64,903	79,024	21.8%
Operating Expense	Rs m	69,811	88,255	26.4%
Pre-provision Operating Profit	Rs m	29,139	32,015	9.9%
Provisions & Contingencies	Rs m	18,499	24,657	33.3%
Profit before tax	Rs m	14,337	9,813	-31.6%
Tax	Rs m	3,696	2,455	-33.6%
Profit after tax	Rs m	10,641	7,358	-30.8%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	2.8	2.8
Net profit margin	%	5.6	3.2

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YES BANK Balance Sheet Analysis

• The bank's deposits during FY23 stood at Rs 2,173.8 bn as compared to Rs 1,970.6 bn in FY22, thereby witnessing an increase of 10.3%.
• Advances for the year stood at Rs 2,032.4 bn as compared to Rs 1,809.6 bn during FY22, a rise of 12.3%.
• Cost of deposits for YES BANK rose 8.4% and stood at 4.6%, while yield on advances rose to 8.8%.
• The lender's investments rose to Rs 767.5 bn during the year from Rs 517.5 bn in FY22.
• Borrowing stood at Rs 777.5 bn, a growth of 7.5% as compared to previous year.
• Overall, the total assets and liabilities for FY23 stood at Rs 3,552.0 bn as against Rs 3,185.8 bn during FY22, thereby witnessing a rise of 11.5%.

YES BANK Balance Sheet – as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	336,899	397,396	18.0%
Advances	Rs m	1,809,590	2,032,365	12.3%
Deposits	Rs m	1,970,626	2,173,822	10.3%
Yield on advances	%	8.3	8.8
Cost of Deposits	%	4.3	4.6
Investments	Rs m	517,540	767,493	48.3%
Borrowings	Rs m	723,402	777,540	7.5%
Total Assets	Rs m	3,185,777	3,552,041	11.5%

Current Valuations for YES BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 0.3, an improvement from the EPS of Rs 0.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 17.6, stands at 72.3 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.3 times, while the price to income ratio stands at 2.3 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Income per share (Unadj.)	Rs	7.6	7.9
Earnings per share (Unadj.)	Rs	0.4	0.3
Diluted earnings per share	Rs	0.4	0.3
Avg P/E ratio	Rs	31.2	72.3
Avg P/ABV ratio	Rs	1.1	1.3
Avg Market Cap	Rs	331,477	531,676
Dividends per share (Unadj.)	Rs	0.00	0.00

Ratio Analysis for YES BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio improved and stood at 93.5x during FY23, from 91.8x during FY22. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio decreased and stood at 7.43x during FY23, from 8.00x during FY22. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): YES BANK's capital adequacy ratio (CAR) was at 17.9% as on 31 March 2023 as compared to 17.4% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank deteriorated and stood at 1.9% during FY23, from 3.2% during FY22. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank deteriorated and stood at 0.21% during FY23, from 0.33% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank deteriorated and stood at 5.06% during FY23, from 5.43% during FY22. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. YES BANK's gross NPA ratio stood at 2.2% as of 31 March 2023 compared to 13.9% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of YES BANK was 0.8% in financial year 2023. This compared with 4.5% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Credit/Deposit Ratio	x	91.8	93.5
Debt to Equity Ratio	x	8.0	7.4
Loans / Deposits	x	0.4	0.4
Capital Adequacy Ratio	%	17.4	17.9
Return on Equity	%	3.2	1.9
Return on Assets	%	0.3	0.2
Return on Capital Employed	%	5.4	5.1
% of Gross NPAs	%	13.9	2.2
% of Net NPAs	%	4.5	0.8
Yield on Advances	x	8.3	8.8
Yield on Investments	x	6.1	4.7

To see how YES BANK has performed over the last 5 years, please visit here.

YES BANK Share Price Performance

Over the last one year, YES BANK share price has moved up from Rs 13.3 to Rs 17.6, registering a gain of Rs 4.4 or around 33.0%.

Meanwhile, the S&P BSE BANKEX is trading at 51,292.0 (up 1.4%). Over the last one year it has moved up from 40,074.0 to 51,292.0, registering a gain of 11,217.9 points (up 28.0%).

Overall, the S&P BSE SENSEX is up 24.4% over the year.

(To know more, you can check out historical annual results for YES BANK here and quarterly results for YES BANK here)