Yes bank - 10 Reasons to buy - Asset quality

• Dont know of any other bank which has consistently shown slippage ratio of sub 1%
• Peak slippage ratio of 0.7% as against market expectation of 3% if the valuations were to stay constant at CMP
• Prudence shown in several occasions including 1) SKS loan recall and then disbursing the loan later 2) Structuring of transactions in project finance type of loans could be different (i.e. SPV level financing) 3) Ultimately it is a call on the management's ability to get the money back when in distress (including the DC loan, which they partially were returned)
• Provisioning has most of the time been above 80% - could be managed up or down to manage earnings; as long as it is greater than 70%, I am ok
• This is the only way to test their underwriting practices apart from anecdotal evidences (often misplaced), because as an external party one cannot know the covenants in a debt transaction
• This opportunity reminds me of Wells Fargo transaction when Mr. Buffett put 40% of his networth to I guess make a five bagger latter (not sure if it was 5 x, but I know it was very profitable)
• The ability to sit through the pain of 50% down side and 2 x upside is what makes this fascinating! Think long term that is 5 years!