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Yes Bank
Yes Bank Ltd. in deep shit!
Posted by :
ZeeNutTracked by: 1 Boarder
The plan to sell the bank will probably fructify by 2011-2012, as entry of foreign banks (earlier supposed to be in 2009) is likely to be delayed. But at that time one can expect a good premium over current price. In my opinion , a min 100% gain from CMP is likely at that time....
In reply to:
Yes Bank Ltd. in deep shit!
Posted by : Guest
Obviously the plan was to sell the bank. And obviously the plan was to jack up valuations to maximum possible.
So what went wrong?
1. Equity market meltdown in January, meant the QIP route got closed. Yes did not have money to lend, expand retail branches now. It has no CASA(current a/c saving a/c) and highest cost of funds.
2. When you are not competitive on cost of funds you will end up building risky assets as the higher the risk the higher the rate, and you cant lend at low rates.
3. Derivatives meltdown meant an imp source of revenue dried up. No wonder Ajay Mahajan quit. He had nothing to do.
4. The impact of the risky assets is the CRO quitting. Definitely he does not want to take the rap for this.
5. With the global meltdown, Yes Bank gambled on employees not having any option and screwed them on pay outs. This led to disgruntled employees most of them looking out.
6.It takes 7-8 years for a branch to break even. But valuation for a bank depends a lot on no. of branches. So what does one do? suddenly start some 70 branches. Ensure it gets more licenses for next year. More valuation when you sell.
The catch here is that now who is going to buy Yes Bank. Most foreign banks are in trouble. End of next year might be better, but how does yes bank sustain its bubble until then.
Caveat Emptor. Dangerous times ahead for a quick fix bank. 
shld one buy now fr long term??
Posted by : KARUNASTracked by: 0 Boarder
I feel Noida Toll ius share worth holding at the moment....
In reply to:
shld one buy now fr long term??
Posted by : panni
Respected Sir,
Please tell me three four blue chip shares in which i may enter after selling my non-blue stocks. I got 2000 HFCL,400 -mahindra ugine,noida toll etc.kindly advise.
shld one buy now fr long term??
Posted by : KARUNASTracked by: 0 Boarder
There are many good shares where the risks are minimum. You may go for RIL, RPL, Rel Cap, RNRL,L&T, in financial secter IDFC, IFCI, PNB, SBI, Yes bank, these are quite safe investment. The gains may be slow, but assured in the long term....
In reply to:
shld one buy now fr long term??
Posted by : panni
Respected Sir,
Please tell me three four blue chip shares in which i may enter after selling my non-blue stocks. I got 2000 HFCL,400 -mahindra ugine,noida toll etc.kindly advise.
Yes Bank Ltd. in deep shit!
Posted by : panniTracked by: 1 Boarder
its the right time to enter the bank as this bank will compete the axis bank in near future,...
In reply to:
Yes Bank Ltd. in deep shit!
Posted by : Guest
Obviously the plan was to sell the bank. And obviously the plan was to jack up valuations to maximum possible.
So what went wrong?
1. Equity market meltdown in January, meant the QIP route got closed. Yes did not have money to lend, expand retail branches now. It has no CASA(current a/c saving a/c) and highest cost of funds.
2. When you are not competitive on cost of funds you will end up building risky assets as the higher the risk the higher the rate, and you cant lend at low rates.
3. Derivatives meltdown meant an imp source of revenue dried up. No wonder Ajay Mahajan quit. He had nothing to do.
4. The impact of the risky assets is the CRO quitting. Definitely he does not want to take the rap for this.
5. With the global meltdown, Yes Bank gambled on employees not having any option and screwed them on pay outs. This led to disgruntled employees most of them looking out.
6.It takes 7-8 years for a branch to break even. But valuation for a bank depends a lot on no. of branches. So what does one do? suddenly start some 70 branches. Ensure it gets more licenses for next year. More valuation when you sell.
The catch here is that now who is going to buy Yes Bank. Most foreign banks are in trouble. End of next year might be better, but how does yes bank sustain its bubble until then.
Caveat Emptor. Dangerous times ahead for a quick fix bank.
Yes Bank Ltd. in deep shit!
Posted by : panniTracked by: 1 Boarder
indiabull finance and yes bank are lucky for me as i could earn money thro these shares,
...
In reply to:
Yes Bank Ltd. in deep shit!
Posted by : Guest
Obviously the plan was to sell the bank. And obviously the plan was to jack up valuations to maximum possible.
So what went wrong?
1. Equity market meltdown in January, meant the QIP route got closed. Yes did not have money to lend, expand retail branches now. It has no CASA(current a/c saving a/c) and highest cost of funds.
2. When you are not competitive on cost of funds you will end up building risky assets as the higher the risk the higher the rate, and you cant lend at low rates.
3. Derivatives meltdown meant an imp source of revenue dried up. No wonder Ajay Mahajan quit. He had nothing to do.
4. The impact of the risky assets is the CRO quitting. Definitely he does not want to take the rap for this.
5. With the global meltdown, Yes Bank gambled on employees not having any option and screwed them on pay outs. This led to disgruntled employees most of them looking out.
6.It takes 7-8 years for a branch to break even. But valuation for a bank depends a lot on no. of branches. So what does one do? suddenly start some 70 branches. Ensure it gets more licenses for next year. More valuation when you sell.
The catch here is that now who is going to buy Yes Bank. Most foreign banks are in trouble. End of next year might be better, but how does yes bank sustain its bubble until then.
Caveat Emptor. Dangerous times ahead for a quick fix bank.
shld one buy now fr long term??
Posted by : panniTracked by: 0 Boarder
Respected Sir,
Please tell me three four blue chip shares in which i may enter after selling my non-blue stocks. I got 2000 HFCL,400 -mahindra ugine,noida toll etc.kindly advise....
In reply to:
shld one buy now fr long term??
Posted by : KARUNAS
One may lose 10k rupees while the market mover from 13k to 14k, if the evaluation is not done properly and if one is lucky inough he can make more than 10k rupees under such market movements but it is always good to be long and to be in blue chips where the risks are minimal bu the gains may not be that big but are assured in medium to long term.
yes bank other view
Posted by :
gajabhauTracked by: 0 Boarder
Investors with a two-year perspective can consider buying the stock of Yes Bank at the current price (135.65). The bank trades at 3 times its June 30 book value and 20 times its FY-08 earnings; at 15.8 times its FY-09 earnings and 2.4 times the FY-09 book value.
Yes Bank is among the youngest and the fastest growing private banks in India. The stock trades at a premium to ICICI Bank and at a discount to private sector rivals such as HDFC Bank and Axis Bank.
The bank has high quality assets, small exposure to the retail segment (2 per cent), comfortable capital adequacy, high proportion of core non-interest income to total income and strong growth in advances and deposits in the current challenging scenario.
However, a relatively small proportion of low-cost deposits and limited branch network are curtailing the company’s retail banking growth opportunities.
Yes Bank is aggressively foraying into retail banking for deposits, while retail advances are not the focus. Its loan book is divided between corporate (57 per cent) and small and medium enterprises (41 per cent).
This loan mix holds the ability to weather the current high interest rate scenario with limited threat of slippage. Until 2007, the bank had no slippages, but in FY-08 and the Q1 of FY09 there has been an increase in delinquencies.
Financials
The 51 per cent earnings growth in Q1FY09 was much slower than the four preceding quarters when the earnings grew over 100 per cent. Yes Bank’s balance-sheet and advances have grown by 130 per cent (compounded annually) in the last four years ended March 2008, whereas the deposits grew at 170 per cent (annualised rate) in the same period.
The high growth in the past is partly attributable to the effect of a low base.
The going can get tough from hereon. In the recent quarter, the bank posted a deposit and advances growth of 45 per cent.
The deposit base declined sequentially as the bank has shed high-cost deposits but improved low-cost Current Account Savings Account (CASA) deposits. After phenomenal growth in FY08, with total income growing at 112.9 per cent, the June 2008 quarter saw a decline in growth. The bank’s net interest income grew at a healthy 122 per cent. However, the slow down in non-interest income as a result of decline in “income from financial markets” tempered the growth of the total income to 37 per cent in the June quarter.
Segments such as transaction banking, financial advisory and third-party product distribution have grown at a good pace to boost ‘other income’.
Improving net interest margin
Comparison on a sequential basis suggests that the bank has managed costs well, with cost of funds remaining flat at 8.4 per cent, despite hikes in CRR and repo rates during the quarter.
This may have been achieved through an improvement in CASA (at (8.9 per cent) by 96 per cent over the year. Improvement in gross yield on advances from 11.2 to 11.5 per cent (PLR was hiked during this period) helped in propping up the net interest margin of the bank to 2.88 per cent.
A Rs 22-crore provisioning was created for the bank’s mark-to-market loss in the available-for-sale bond portfolio. There was increase in gross NPA to Rs 21.3 crore and net NPA to Rs 17.4 crore, amounting to gross NPA/gross advance of 0.21 per cent and the net NPA proportion of 0.17 per cent.
The provision cover is low at 18 per cent but the bank is confident of recovering these advances. The bank has said that there has been no further loss in forex derivatives in the quarter in addition to the provision it made in the previous quarters.
The capital adequacy of Yes bank stands at 15 per cent after recent capital raising of Rs 564 crore. This will help the bank increase its asset base with ease this year. The credit-deposit ratio of the bank at 80 per cent is high but may come down as the balance-sheet expands.
Outlook
While the bank’s balance-sheet may see lower growth, it may nevertheless grow at a rate superior to its peers, given its aggressive moves in opening retail branches, targeting SMEs and also building corporate relationships. Yes Bank has 100 branches mostly in large cities and it is likely to add 17 more (it has already received licences to open these branches) this fiscal year, but in future the bank may have to look towards semi-urban and rural areas to continue growing at these rates.
Yes Bank also plans a foray into asset reconstruction business by the end of this year; this can boost its ‘other income’. The bank intends to increase its SME clientele to 1,000 by FY-09 and plans to add 5,000 customers under its Urban-Micro Finance programme.
The recent PLR hike to 17 per cent will cushion the bank from increasing cost of funds and maintain its net interest margins in the current quarter but there could be more slippages as the advances grow. The FII exposure of 28 per cent as of June 2008 exposes the stock to the risk of institutional liquidation.
courtesy bl...
Yes Bank Ltd. in deep shit!
Posted by : GuestTracked by: 1 Boarder
Obviously the plan was to sell the bank. And obviously the plan was to jack up valuations to maximum possible.
So what went wrong?
1. Equity market meltdown in January, meant the QIP route got closed. Yes did not have money to lend, expand retail branches now. It has no CASA(current a/c saving a/c) and highest cost of funds.
2. When you are not competitive on cost of funds you will end up building risky assets as the higher the risk the higher the rate, and you cant lend at low rates.
3. Derivatives meltdown meant an imp source of revenue dried up. No wonder Ajay Mahajan quit. He had nothing to do.
4. The impact of the risky assets is the CRO quitting. Definitely he does not want to take the rap for this.
5. With the global meltdown, Yes Bank gambled on employees not having any option and screwed them on pay outs. This led to disgruntled employees most of them looking out.
6.It takes 7-8 years for a branch to break even. But valuation for a bank depends a lot on no. of branches. So what does one do? suddenly start some 70 branches. Ensure it gets more licenses for next year. More valuation when you sell.
The catch here is that now who is going to buy Yes Bank. Most foreign banks are in trouble. End of next year might be better, but how does yes bank sustain its bubble until then.
Caveat Emptor. Dangerous times ahead for a quick fix bank....
shld one buy now fr long term??
Posted by : KARUNASTracked by: 0 Boarder
One may lose 10k rupees while the market mover from 13k to 14k, if the evaluation is not done properly and if one is lucky inough he can make more than 10k rupees under such market movements but it is always good to be long and to be in blue chips where the risks are minimal bu the gains may not be that big but are assured in medium to long term....
In reply to:
shld one buy now fr long term??
Posted by : panni
Please tell me if i inves one lac rupees when marcket is at 13000,& sell it at 14000,can i earn 10,000/-
shld one buy now fr long term??
Posted by : KARUNASTracked by: 0 Boarder
Dear,
One has to have a lot of patience for making good gains....
In reply to:
shld one buy now fr long term??
Posted by : panni
Please tell me if i inves one lac rupees when marcket is at 13000,& sell it at 14000,can i earn 10,000/-
shld one buy now fr long term??
Posted by :
varun_blyTracked by: 0 Boarder
It depends on the movement of stock you hold....
In reply to:
shld one buy now fr long term??
Posted by : panni
Please tell me if i inves one lac rupees when marcket is at 13000,& sell it at 14000,can i earn 10,000/-
shld one buy now fr long term??
Posted by : panniTracked by: 0 Boarder
Please tell me if i inves one lac rupees when marcket is at 13000,& sell it at 14000,can i earn 10,000/-...
In reply to:
shld one buy now fr long term??
Posted by : panni
Please tell me if i inves one lac rupees when marcket is at 13000,& sell it at 14000,can i earn 10,000/-
Top Level and Important Exits :
Posted by :
gautam56Tracked by: 0 Boarder
With exodus of so many senior executives, as reported in this blog, don't you think RBI should seek clarification "sou motto" from the management taking cue from the smoke and assuming MTM dealings on fire?
Suggest - abstaining from further purchases/investment on dips until the 2nd quarter actual performance is known....
In reply to:
Top Level and Important Exits :
Posted by : Guest
First to leave Mr Ajay Mahajan, Head Treasury, Heard Yes bank has filed a suit against him.
Subir Bisht head of risk is also leaving. Plu 5 another people in Risk out of total 10 people.
Insiders say that Treasury MTM than twice the networth.
Top Level and Important Exits :
Posted by : GuestTracked by: 0 Boarder
First to leave Mr Ajay Mahajan, Head Treasury, Heard Yes bank has filed a suit against him.
Subir Bisht head of risk is also leaving. Plu 5 another people in Risk out of total 10 people.
Insiders say that Treasury MTM than twice the networth.
...
Catch It Young
Posted by : GuestTracked by: 0 Boarder
All set to become the next HDFC/AXIS. Just give it 2-3 years....
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