RATIO INTERPRETATION

NET INTEREST MARGIN RATIO

The most important ratio when it comes to banks and financial companies is the is
Net Interest Margin.

It is the difference between the interest income generated and the amount of interest
paid out to their lenders (deposits), divided by total assets.

An ideal financial company should have NIM above 3%.

YES Bank has a Net Interest Margin of 4% which has significantly improved from last
year’s 3.41%.This shows that operational efficiency has improved in the lending
process.
Return on Equity

Return on equity measures the percentage of profit we make for every dollar of equity
invested in the company.

Ideally a financial company should have an ROE above 10%.

YES Bank has an ROE of 15.10% which is above the industry average and shows that
the bank is providing good returns on shareholders funds.
Net NPA Ratio & Provision for Non Performing Assets
NPA ratio is used to measure the asset quality of the bank's loan books. NPA are
those assets for which interest is overdue for more than 3 months.

Net NPA ratio above 1% is not healthy.

YES Bank has an NPA ratio of 0.81% which is as per the industry standards which
shows the ability of the management in recovering the dues is good.
Return on Assets
Return on assets tells you what percentage of every dollar invested in the business
was returned as profit. It simply shows how effective the company is at using those
assets to generate profit.

Investement in a financial company whose ROA is below 1% is not advisable.

YES Bank has Return on Assets of 1.55% and is improving over last year which was 1
.35%.
Capital Adequacy Ratio
The capital adequacy ratio, also known as capital to risk-weighted assets ratio,
measures a bank's financial strength by using its capital and assets.

It is used to protect depositors and promote the stability and efficiency of financial
systems around the world.

YES bank has a capital adequacy ratio of 7.82% which has grown from 5.94% in last
year.

The industry ratio is 8% and YES bank is nearly the industry average which shows it is
maintaining a decent capital to its risk weighted assets.
CREDIT DEPOSITS RATIO
It is the ratio of how much a bank lends out of the deposits it has mobilised.

It indicates how much of a bank's core funds are being used for lending, the main banking activity.

A higher ratio indicates more reliance on deposits for lending and vice-versa.

The credit deposit ratio is 75% for banks.

YES Bank has a credit deposit ratio of 93% which shows that it effectively mobilises its funds and is
doing well in its core business.