Bank Performance Analysis

SUBMITTED BY - HARSH CHOUBEY (PGSF1919)

PROFITABILITY ANALYSIS
Mar-16 Mar-17 Mar-18

Rs in Crore Rs in Crore Rs in Crore

1 Total Assets 165263 215060 312446
2 Earning Assets
Balances with Banks in Deposit Accounts 56 62 78
Balances with Banks & money at Call & Short Notice 232 2521 580
Balances with Banks Outside India 1729 2262 1449
Investments + 48838 50032 68399
Advances + 98210 132263 203534
Total Earning Assets 149065 187139 274040
3 Interest bearing Liabilities
Saving Deposits 20418 32782 44350
Term & Other Deposits 80377 91004 127562
Borrowings 10762 13353 25540
Subordinated Debt
Total Interest bearing liabilities 111557 137139 197452
Other liabilities 8098 11525 11056
Equity Capital 421 456 461
Reserves 13366 21598 25298
Total Equity 13787 22054 25758

5 Interest Income 13533 16425 20267

6 Interest Expenditure 2976 4117 12530
10 Non-interest operating income 2712 4157 5224
Operating Revenue 5688 8274 10437
11 Non-interest operating Expenditure 2976 4117 5213
12 Provisions and Contingencies 536 793 1554
Provisions and Contingencies include provision for tax
Profit After tax 2539 330 4225

Profitability Ratios
Return on Assets= NI/ TA 1.54% 0.15% 1.35%
Equity Multiplier TA/ TE 12 10 12
TE/ TA 8.34% 10.25% 8.24%
ROE=ROA X EM 18.42% 1.50% 16.40%

NI/ OR 0.45 0.04 0.40

OR/ TA 3.44% 3.85% 3.34%
TA/ TE 11.99 9.75 12.13
ROE= NI/OR*OR/TA*TA/TE 18.42% 1.50% 16.40%

(II - IE)/ TA 6.39% 5.72% 2.48%

(OI-OE)/ TA -0.16% 0.02% 0.00%
Provisions/TA 0.32% 0.37% 0.50%
ROA 1.54% 0.15% 1.35%

(II- IE)/E A 7.08% 6.58% 2.82%

EA/ TA 90.20% 87.02% 87.71%
(II - IE)/ TA 6.39% 5.72% 2.48%
NIM 0.07 0.07 0.03
II/ EA 9.08% 8.78% 7.40%
IE/ Intt Bearing Liab 2.67% 3.00% 6.35%
Intt Bearing Liabilities/ EA 67.50% 63.77% 63.20%
Spread 7.08% 6.58% 2.82%

Efficiency ratio= Non intt exp/ (Net Interest Income+Non intt income) 22.43% 25.00% 40.22%

Risk Ratios
Liquidity Risk= Short term securities/ Deposits 0.48 0.40 0.40
Interest Rate Risk = Interest Sensitive Assets/ Interest Sensitive Liabilities 0.61 0.55 0.54
Credit Risk = Provisioning / Assets 0.003 0.004 0.005
Capital Risk = Capital / Assets 0.003 0.002 0.001
Leverage ratio= Total equity/Total assets 0.083 0.103 0.082
Total capital ratio= (Total equity + Long-term debt + Reserve for loan
losses)/Total assets 0.15 0.16 0.16
Provision for loan loss ratio= PLL/ TL (provision for loan losses/total
loans and leases) 0.01 0.01 0.01
Loan Ratio = Net loans/ Total assets 0.59 0.61 0.65
Loss Ratio = Net charge-offs on loans (gross charge-offs minus
recoveries)/ Total loans and leases
0.05 0.06 0.06
Nonperforming ratio= Nonperforming assets (nonaccrual loans and
restructured loans)/Total loans and leases 0.003 0.008 0.006

Operating efficiency (cost control)= Wages and salaries/Total expenses

0.09 0.10 0.10

Other Financial Ratios

Tax rate = Total taxes paid/Net income before taxes 32.57% 33.98% 31.80%
Gap ratio = (Interest rate-sensitive assets – Interest rate-sensitive
liabilities)/ Total assets -0.19 -0.19 -0.19
 Analysis and comments Analysis and comments
Mar-19 Mar-20

Rs in Crore Rs in Crore
380826 257827

199 635
3147 31
3915 453
89522 43915
241500 171444
338282 216478
Yes Bank's ROA has been decreasing from 1.54% in 2016 to -6.37% which implicates that the bank
went into a loan spree which was gauged by decreasing ROA, which severly affected the company
46711 18564
152357 77301 The EM of Yes Bank has been quite stable from 2016 (12) to 2020 (12) which interprets that the b
27699 18930
ROE of Yes Bank has also been negative and has been decreasing continuously and has gone nega
226768 114795
17888 16946 Net Profit Margin.- The bank has been relentlessly striving to achieve profit but hasnt been able t
463 2510 . Low operating efficiency Asset utilization spread/TA. Increased then decreased. for every 100 ar
26441 19216
26904 21726 The NI/OR ratio is the profit margin, which has been decreased and gone negative for the bank, w
to no cost savings that has decreased this ratio.
29625 26067
19816 19261 The Net Interest Margin has been .07 for 2016 and 17 and after that has been fixed on 0.03. Whic
4590 3441 loans compared to its paying out in interest on deposits. The spread kept decreasing till 2019, but
10854 10170
depositors.
6264 6729
The Bank's Efficiency ratio has grown highly (65.67%) which is not a good indicator, as it means th
5778 32758

Risk Ratios -
1720 -16418 The Liquidity Risk Ratio of Yes Bank has decreased and saw an increase in 2020, which means tha

Interest rate risk -

Interest rate risk in the banking book (IRRBB) more specifically refers to the current or prospectiv
0.45% -6.37% Bank, it has increased and then decreased.
14 12 Credit Risk - The credit risk has been increasing for the Yes Bank which means there is an increase
7.06% 8.43%
6.39% -75.57% Capital Risk - The capital risk of Yes Bank has been less than 1 but has eventually increased from 0
going up which could affect the growth of the Yes Bank. The provision for loan loss ratio has incre
0.16 -1.61 increased.
2.85% 3.94%
14.15 11.87 Loan ratio - Loan Ratio: As a proportion of total assets, the loans to assets ratio calculates the tota
6.39% -75.57% which indicates that the bank does not offer an excessive and questionable loan, which is a positi
management or trading.
2.58% 2.64%
-0.44% -1.28%
Non Performing ratio - This Ratio of the bank has increased which is not at all a good sign and is a
1.52% 12.71%
amounts, whereas a small ratio means that the outstanding loans present a low risk to the bank.
0.45% -6.37%
The Tax rate has decreased from 32.57% to 21.40%, which means that Yes Bank has been trying to
will also rise.
2.90% 3.14%
88.83% 83.96%
2.58% 2.64%
The government had recently put private sector lender Yes Bank under moratorium till April 3 and
However, Yes Bank’s books show that warning bells had been ringing for more than a year. The ba
the last two fiscals.

Things have not been great for Yes bank, as in the last five years, Yes Bank went on a loaning spre
The bank’s Gross NPA% (loans overdue for >90 days) zoomed to 7.39%, the highest among compa
 will also rise.

The government had recently put private sector lender Yes Bank under moratorium till April 3 and
0.03 0.03 However, Yes Bank’s books show that warning bells had been ringing for more than a year. The ba
8.76% 12.04% the last two fiscals.
8.74% 16.78%
59.55% 44.52% Things have not been great for Yes bank, as in the last five years, Yes Bank went on a loaning spre
2.90% 3.14% The bank’s Gross NPA% (loans overdue for >90 days) zoomed to 7.39%, the highest among compa
RBI says a PCR of >70% is desirable.
43.50% 65.67%
The growth and profitability has been quite dissatisfying. Everything is -ve about the ratios and ot

There are a LOT other bad figures for Yes Bank, for now it has been saved but it has to really keep
0.45 0.46
0.59 0.57
0.015 0.127
0.001 0.010
0.071 0.084

0.14 0.16

0.02 0.19
0.62 0.54

0.21 1.73

0.019 0.050

0.08 0.05

27.02% 21.40%

-0.16 -0.13
 Analysis and comments Analysis and comments Analysis and comm

which implicates that the bank has been ineffective in converting its investments into its Net income, which means thatbank has not able t
h severly affected the company's profit. The bank's management is continuously failing to utilize its assets to generate returns and must tak

12) which interprets that the bank has been using a quite fixed amount of debt for financing its assets which is a good indicator but this sho

ontinuously and has gone negative. This means the bank is in financial distress.

ve profit but hasnt been able to achieve it. The loan spree & high NPA meant poor profitability, gauged by Yes Bank’s sinking Return on Asse
en decreased. for every 100 ars of total assets, their lost assets are only 4.63 times. Bad debts are increasing.

d gone negative for the bank, while OR/TA which reflects asset utilization. The asset utilization and equity multiplier did not change, hence,

at has been fixed on 0.03. Which means that Yes Bank's profitability and growth has been decreased from the previous years, maybe becau
d kept decreasing till 2019, but saw a small growth from 2.19% in 2019 to 3.14% in 2020, which is a good indicator as the bank's earning gr

a good indicator, as it means that Yes Bank's expenses have gone very high, or we can also say that its revenue has decreased.

ease in 2020, which means that Yes Bank has improved the mainating the hold of high-liquid asset, which is use to support the cash outflow

rs to the current or prospective risk to the bank's capital and earnings arising from adverse movements in interest rates that affect the insti
hich means there is an increase in risk of non-payment of a loan by the borrowers.

as eventually increased from 0.003 to 0.127, possibility that an it may lose money from an investment of  capital. Leverage Ratio - It has be
ion for loan loss ratio has increased which is not a good indicator, as it highlights the high riskiness in loans. It indicates the riskiness of the

assets ratio calculates the total loans outstanding. The higher the ratio, the higher defaults will be more risky for a bank. Here, Yes bank's n
tionable loan, which is a positive sign. May be, the bank is deriving a relatively larger portion of its total incomes from more-diversified, no

s not at all a good sign and is a concern for Yes bank as its NPAs level has increased, A high ratio means that the bank is at a greater risk of l
present a low risk to the bank. Further, the operating efficiency has decreased from 9% to 5% which means the operating costs has increase
hat Yes Bank has been trying to clean up their balance sheet through these fluctuations. Finally, the gap ratio has has been negative which

nder moratorium till April 3 and capped deposit withdrawal at ₹50,000 after severe deterioration of the bank’s financial position.
ng for more than a year. The bank went on a loan spree even as bad loans mounted. Meanwhile, depositers withdrew large amounts, resulti

es Bank went on a loaning spree. Its total advances rose by 334% between FY14 and FY19, the highest rise among comparable banks in the
39%, the highest among comparable banks. Yes Bank did not make enough provisions in its profits. Its Provision Coverage Ratio in FY19 was
nder moratorium till April 3 and capped deposit withdrawal at ₹50,000 after severe deterioration of the bank’s financial position.
ng for more than a year. The bank went on a loan spree even as bad loans mounted. Meanwhile, depositers withdrew large amounts, resulti

es Bank went on a loaning spree. Its total advances rose by 334% between FY14 and FY19, the highest rise among comparable banks in the
39%, the highest among comparable banks. Yes Bank did not make enough provisions in its profits. Its Provision Coverage Ratio in FY19 was

g is -ve about the ratios and other figures of Yes Bank.

saved but it has to really keep things steady if it wants to survive in this dyanmic environment.
 Analysis and comments Analysis and comments

thatbank has not able to convert its investments. Yes bank had also
ate returns and must take steps in order to improve the ratio.

od indicator but this should be lowered.

s sinking Return on Assets  . Operating expenses have been increasing

did not change, hence, the profit margin must have decreased due

ous years, maybe because the bank is earning low interest on its
as the bank's earning grew v/s how much it has to pay to its

decreased.

upport the cash outflow for 30 days.

rates that affect the institution's banking book positions. In case of Yes

everage Ratio - It has been increasing which means debt usage is

ates the riskiness of the banks and also that the no. of bad debts has

bank. Here, Yes bank's net loans are around 5% of its total asset,
om more-diversified, non-interest-earning sources, such as asset

nk is at a greater risk of loss if it does not recover the owed loan

rating costs has increased due to ineffective cost control.
as been negative which means if interest rates rise, the banks profit

ncial position.
ew large amounts, resulting in the bank’s profitability nosediving in

omparable banks in the period. Many borrowers started defaulting.

erage Ratio in FY19 was 43.1%, the lowest among comparable banks.
ncial position.
ew large amounts, resulting in the bank’s profitability nosediving in

omparable banks in the period. Many borrowers started defaulting.

erage Ratio in FY19 was 43.1%, the lowest among comparable banks.