Yes Bank's June'19 Shareholding: Some green signals.

The April to June'19 quarter has probably been the worst quarter faced by Yes Bank at the stock market. From a level of around Rs.275 on 1st April 2019, Yes Bank's share price collapsed nearly 64% to end around the Rs.100 mark at the end of June 2019. The price fall started a few days before the announcement of Q4FY19 Results, as if some people had got a whiff of the huge Provisioning and the resulting Net Loss that the Bank was to declare.

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Yes Bank's share price has continued to fall more & more after the announcement of Q4FY19 numbers. Hence it was quite evident that there must have been massive changes in Shareholding structure of different segments of investors. Following table shows the Shareholding pattern of various segments over the last 5 quarters:

There has been no significant change in Promoters Shareholding over the last 5 quarters. But there has been significant changes in the Shareholding of other 2 segments over the last 5 quarters.

Institutional holdings were at a high of 67.67% in June'18, which dropped to 57.7% in December'2018. During this period, Yes Bank's share price dropped from Rs.330 levels to Rs.180 levels. By March'2019, the number again increased to 61.31%, which resulted in the share price rebounding to about Rs.275 levels. And now during June'19 quarter, their holdings have dropped to a low of 50.72%, resulting into a massive share price erosion of 64% during the quarter.

In the Institutional category of Investors, the FPIs are the largest holders and also the biggest influencers of Yes Bank's share price. Out of the 17% reduction in Institutional shareholding between June 2018 to June 2019, the FPIs contributed to about 9% drop. Mutual Funds contributed to 5% reduction and Insurance Companies the rest. Amongst the Mutual Funds, Birla Sunlife, HDFC AMC and Reliance MF have been the biggest sellers. From Insurance companies, ICICI Prudential was the biggest seller. LIC of India has not just held on to it's stake in Yes Bank, in fact it even increased it by 0.8% in December 2018 quarter to take it to almost 8.9% now. LIC is probably the single largest non-Promoter shareholder in Yes Bank currently.

Considering the volatility in FPIs buying & selling pattern of Yes Bank's shares, they could very well start buying again this quarter, especially after Yes Bank's Q1FY20 numbers clearly suggest that the situation is not at all as bad as the market was fearing during the previous quarter.

Coming to Non-Institutional Shareholders, the Small Retail shareholders are clearly doing exactly opposite of what the FPIs are doing. These shareholders buy when the FPIs are selling and they sell when the FPIs are buying. That means they buy when the price is dropping and they sell when the price is rising. This lot of shareholders seem to be doing the clever thing. Between June 2018 and June 2019, their shareholding has increased from 6.27% to 18.72%.

A few Corporates too seem to have got interested in buying a stake in Yes Bank as the price was falling. This category has seen it's shareholding increase from 2.53% to 4.63% in just the June 2019 quarter. This is a positive sign as these shareholders are likely to be better informed investors and they know the risks & rewards of investing in Yes Bank's shares in the current situation. NRIs too have increased their holding from 0.89% to 1.21% in the quarter gone by.

But the biggest positive sign is the fact that Employees of Yes Bank have acquired nearly 3.5 crore shares of the Bank, which is 1.53% stake in the Bank, during the June 2019 quarter. A total of over 600 employees of Yes Bank have together acquired over 3.55 crore shares during the quarter. This is the single biggest signal that things are not as bad with the Bank as the market is fearing or the rumour mills are spreading.

It will be interesting to see how the share price of Yes Bank behaves in this quarter and how the shareholding pattern evolves.

Do Share your thoughts on this report or Views on the points discussed. Awaiting your Comments.

Yes Bank Q1FY20: This ship is NOT Sinking

Following are the important points from Yes Bank's Q1FY20 Numbers and Investor Presentation:

* Total Income stood at Rs.9089 crores, jump of 8% Q-o-Q and 10% Y-o-Y.

Interest Income stood at Rs.7816 crores, flat Q-o-Q and 19% higher Y-o-Y. This growth is despite the fact that some previous Interest Earnings related to recent NPA accounts were reversed. Other Income stood at Rs.1273 crores, 139% higher Q-o-Q and down 25% Y-o-Y. Other Income was boosted by Treasury Gains of about Rs.450 crores.

* Operating Profit stood at Rs.1959 crores, jump of 48% Q-o-Q and down 20% Y-o-Y.

Operating Expenses came at Rs.1594 crores, lower by 7% Q-o-Q and an increase of just 9% Y-o-Y. Some bit of serious savings on operating costs clearly evident. Interest Expended stood at Rs.5535 crores, higher by 3.4% Q-o-Q and by 27% Y-o-Y.

* Provisioning for the quarter stood at Rs.1784 crores, compared to Rs.3662 crores in previous quarter and Rs.626 crores a year ago.

Provisioning is said to have included about Rs.1100 crores of one-time Marked-to-Market losses on a few investments due to rating downgrade of the assets. That means NPA Provisioning stood at just about Rs.700 crores.

* Net Profit stood at Rs.114 crores, compared to a Loss of Rs.1507 crores in the previous quarter and a Profit of Rs.1260 crores a year ago.

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* Retail Term Deposits increased 38% Y-o-Y and 8% Q-o-Q to a figure of about Rs.63,300 crores.

This is excellent news, especially in the backdrop of the terrible quarter Yes Bank faced at the stock market, while being surrounded by huge amounts of rumour-mongering, claiming that the Bank is set to face a huge Liquidity crisis and will find it difficult to survive. Strong growth in Retail Term Deposits means that customers are reposing faith in the Bank.

* Corporate Term Deposits too grew by 13% Y-o-Y and 1.2% Q-o-Q to a figure of about Rs.93,400 crores.

Even the corporate clients seem to have held faith in Yes Bank and did not get too affected by the rumours in the Stock market.

* Retail Loan Book grew 43% Y-o-Y and 7.2% Q-o-Q to reach a figure of about Rs.43,200 crores.

Retail segment contributed about 61% of the incremental growth in Yes Bank's overall Loan Book. It's other segments, i.e. Corporates and MSMEs too continued on the growth path, though at a slower pace of about 5 to 6%. Yes Bank's Corporate Loan book now stands at about Rs.1,31,800 crores.

* Yes Bank continues to post strong growth in all kinds of Digital Transaction processing with Market Leadership in many of them.

Yes Bank processed about 44 million IMPS transactions, 85 million AePS (Aadhar enabled Payment System) and 767 million UPI transactions during Q1FY20, with strong double-digit growth Q-o-Q.

* Gross NPAs have increased to Rs.12,092 crores and Net NPAs to Rs.6,883 crores.

This is only major sore point from Yes Bank's Q1 numbers. Most of the NPAs seem to be coming from the EPC industry segment. The most likely accounts are from Reliance Infrastructure subsidiaries and Essel Group companies. But the promoters of both the groups have promised to repay all loans by selling their Assets. Even Yes Bank management seems to be fairly confident about recovery from most of these NPA accounts.


Do Share your thoughts on this report or Views on the points discussed. Awaiting your Comments.

Are things really so bad with Yes Bank?

Until less than a year ago, Yes Bank was touted to be amongst the best Private Sector Banks in India. Over the years, Yes Bank has earned a name to be a high-tech Bank, one which makes good use of technology to innovate with products & services. Yes Bank was probably the first Bank to bring 2-step authentication for Internet Banking facility, at a time when many other banks weren't even offering decent Internet Banking facility. Yes Bank is still the leader in many new generation transaction services like UPI or IMPS or Aadhar-enabled Payment System or API Banking, where it is the Banking partner for many Fintech companies like PhonePe, etc.

Over the last 10-15 years, Yes Bank has built a decent reputation to be amongst the best when it came to Corporate Banking, with lots of innovative products & knowledge-based services. At the same time, it was spreading it's Branch Network to reach a scale of over 1100 branches currently. With a decent number of Branches, spread across most of the important cities in India, Yes Bank has now started focusing on increasing it's Retail & SME Banking business. With a strong 62% Y-o-Y Growth in Retail Loan book, it now constitutes 16.7% of the Total Loan Book, which was just 12.2% a year ago. Even the Retail Term Deposits have grown over 40% Y-o-Y. This momentum is expected to continue in this year & the next, as the Bank wants to widen it's customer reach & reduce dependence on Corporate Banking.

A few days ago, when Yes Bank reported it's first Quarterly Net Loss for Q4FY19, on the back of a large provisioning related to IL&FS exposure, the share price of Yes Bank has been battered like as if the Bank is about to shut down in the near future. Just have a look at the share price movement of Yes Bank over the last 1 year or so:

Yes Bank was trading at near Rs.400 level in August'2018. A few weeks after that, the news of RBI's rejection to extension of Mr. Rana Kapoor's term as MD & CEO came in and the share price got hammered to about Rs.160-170 levels. After stabilising for a few months, it was regaining strength after the appointment of an experienced Banker, Mr. Ravneet Gill as the new MD & CEO of Yes Bank. But the share price is again behaving as if all hell has broken loose on Yes Bank with just one large Provisioning. Somehow I feel that all the Business Channels are working in tandem to write-off Yes Bank's survival chances. I certainly feel that things are certainly not as bad with Yes Bank as they are being made out to be by most of the Business channels as pink newspapers.

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At today's closing price, Yes Bank's Market Cap is just under Rs.32,000 crores. I feel this is nothing short of Crazy. Look at all the PSU Banks. They have much much larger NPA problems, have been writing off loans since the last few years and are still sitting on large Net NPA figures. Even those Banks are trading at better valuations than Yes Bank. Take the case of State Bank of India, India's largest Bank. It has a Loan Book of almost Rs.22 lakh crores, nearly 9 times the size of Yes Bank Loan Book. But it's sitting on Gross NPA of over Rs.1.72 lakh crores, which is nearly 22 times that of Yes Bank's figure. Despite years of large Provisionings, SBI's Net NPA figure still stands at almost Rs.66,000 crores, which is nearly 15 times that of Yes Bank's figure. Still State Bank of India has a Market Cap of over Rs.2.80 lakh crores, which is nearly 9 times that of Yes Bank's figure.

In the adjoining table, I have compared Yes Bank's FY'19 figures with that of Bank of India's FY'19 figures. Bank of India is much much smaller than State Bank of India and hence is within comparable range of Yes Bank.

Bank of India's Loan Book is nearly 57% larger than Yes Bank's Loan Book. Still it's Interest Income & Net Interest Income are just about 40% higher. Clearly indicates Yes Bank's superior yields. On the other hand, BoI's Operating Expenses are 71% higher than Yes Bank's. Which again shows the PSU Bank's Operating inefficiencies when compared to a modern Private Sector Bank. BoI's Provisions are nearly 3 times that of Yes Bank's, which pulled the former into a substantial Net Loss. Thanks to Losses since the last few years, BoI has not been declaring any Dividends since the year 2015. Whereas Yes Bank continues to pay Dividend.

BoI's Gross NPA is nearly 7.7 times that of Yes Bank's figure, while it's Net NPA is still 4.2 times Yes Bank's figure. Despite all these negatives, Bank of India's Market Cap is just about 29% lower than that of Yes Bank's figure. In a couple of years time, Yes Bank will be close to overtaking Bank of India in terms of Total Income, thanks to it's faster growth rates. The management has projected a growth rate of between 15 to 20% for FY'20 and I think it can easily achieve this figure.

The point that I wish to make is that: All the recent negative environment surrounding Yes Bank, created by all the Business Channels & Business dailies, are short term in nature. Their effect with go away after a few weeks. Appointment of a Board member by RBI on Yes Bank's board shouldn't be taken as such a big negative. I think RBI itself has undergone management change recently and the new Governor wants to play it safe. Having their nominee on Yes Bank's board will help the Bank to regain it's reputation sooner rather than later. I think this is an excellent opportunity for Long Term Investors to get into Yes Bank. I still have faith in Yes Bank and believe that it has what it takes to be the next HDFC Bank or something on those lines. Just give it some time.

Do Share your thoughts on this report or Views on the points discussed. Awaiting your Comments.

Yes Bank's Performance Update after Q2-FY'17.

Over the last three & half years, I have posted a handful of reports on Yes Bank, which included a couple of comparison reports too. The first report was written in July'2013: Yes Bank - Future HDFC Bank available at PSU Bank valuations!!! I am happy to say that Yes Bank's performance over the last over three years has not failed my expectations & estimations. The most recent report was written about 18 months ago (Yes Bank - Good Growth, Attractive Valuations). Hence I thought it fit to post a Performance Update on Yes Bank's Financials & Valuation.

The Quarterly as well as Trailing-Twelve-Months Profit & Loss Numbers are already available on my blog at this link: http://www.stockslogic.in/2016/02/yes-bank-ltd-results.html

Hence I would focus on other details in this report. Any bank operates under 3 primary business heads: 1) Treasury Operations - Here it's in-house team trades in different kind of bonds, depending on liquidity situation at the bank & bond prices. 2) Wholesale or Corporate Banking - This division focuses on providing Banking/Lending services to SMEs & Corporates. 3) Retail Banking - This division is for providing services to individual consumers.
Older Banks with large Branch Networks since many years generally have a substantial contribution from Retail Banking operations, going upto about 35 to 45% of it's Total Income. Large Retail presence with wide network of branches is also important for any bank in terms of access to low-cost deposits. Current Account deposits form the lowest cost deposit base for Banks, followed by Savings Account deposits. Any bank with high proportion of Current Account & Savings Account (CASA) Deposits is able to offer more competitive Interest Rates on Loan products and also enjoy higher Net Interest Margins. This is one area where Yes Bank still has a lot of ground to cover, not just with older peers like HDFC Bank or Axis Bank, but even with contemporary peers like Kotak Bank or IndusInd Bank.

Have a look at the chart alongside, which shows the Trailing-Twelve-Months progress of Yes Bank's Segment-wise Income figures over the last 3 years. Yes Bank's Corporate Banking services have been it's pillar of strength right from the time of it's inception. And it continues to provide robust growth for the Bank even now with over 65% of Yes Bank's Total Income still coming from this division. Treasury Operations contributed nearly a third of Yes Bank Total Income in September'13, but has seen it's contribution coming down to a quarter of the Bank's Total Income in September'16, mainly because it did not grow at the same pace as that of the other divisions. Yes Bank's Retail Banking division has shown some urgency for growth only in the last 4 quarters. After posting a steady Y-o-Y growth of about 35% for periods ending Sept'14 and Sept'15, the Retail Division posted a handsome growth of nearly 70% for 12-months ending Sept'16. Yes Bank will need to maintain over 50% growth in Retail Banking business for another 2 or 3 years to see it's contribution improve from existing low levels of under 9% of Total Income to something like 15 to 20%. Even a relatively not-so-old Kotak Bank gets nearly 45 to 50% contribution from it's Retail Banking division. Hence I think Yes Bank should certainly be targeting to expand it's Retail Banking business' contribution to something like 25 to 30% of Total Income in the next 5 years. Growth in Retail Banking business will only help the Bank's other divisions by giving it access to increased CASA Deposits.

Another big aspect of any Bank's business is how well it manages to keep it's Cost of Funds low and also not let it's Bad Loans number go high. The Chart alongside shows the Interest & Provisioning figures as a Percentage of Yes Bank's Total Income. Interest Cost is consumes the biggest portion of any Bank or Finance Company's Total Income. In September'13, Interest Cost formed just over 62% of Yes Bank's Total Income, which the Bank has managed to bring substantially lower to about 53.3% of Total Income in September'16. This is an excellent progress, especially considering the fact that the last Equity-based Fund raising done by Yes Bank was sometime in June'14 quarter, i.e. over 27 months ago. This excellent control over Cost of Funds has helped Yes Bank expand it's Net Profit margin from 13.54% in Sept'13 to 16% in Sept'16, i.e. about 250 bps improvement in 3 years time.

Over the last couple of years we have seen the Banking sector being in the NPA storm with almost every PSU Bank and many Private Banks too having to make large Provisioning towards NPAs. In such a scenario, Yes Bank has managed to keep it's Provisioning figure to under 4% of Total Income throughout the last 4 years, despite having almost it's entire Loan Book exposed towards Corporates. This clearly talks about the quality of assets that Yes Bank has managed to identify & Finance.

Valuations & Stock performance: First have a look at Yes Bank's Stock Price chart for the last 2 years:

After spending over year within a range Rs.650 to Rs.900, Yes Bank's stock price finally a breakout in February'16, which lead to a sharp rally from Rs.675 levels to about Rs.1400 levels, that means doubling in a matter of just about 6 to 7 months. Since then the stock price has seen some bit of correction & consolidation in the Rs.1100 to 1300 range. At the current price of about Rs.1130, Yes Bank is trading at just over 16 times it's T-T-M EPS of Rs.69/-. In the current market scenario, when almost the entire market has undergone some decent correction over the last couple of months, Yes Bank's valuation cannot be called 'Very Cheap' anymore. But a P/E Ratio of 16 certainly cannot be called expensive for a quality stock like Yes Bank. As and when the market stabilises & starts progressing upwards again, I am expecting Yes Bank's stock to move towards a 20+ P/E Ratio. The quality of Yes Bank's business performance certainly deserves higher valuations in stable & progressive market conditions. Long Term investors should continue to remain invested & somebody who wishes to book atleast some portion of profits, may do so when the stock hits a P/E Ratio of something closer to 20 to 22 levels. A P/E Ratio of 15 or lower will make it a very attractive Buy option of other investors.

Yes Bank - Good Growth, Attractive Valuations.

Yes Bank Ltd. just announced it's Q4 & FY'15 results & I managed to get into breaking the numbers in more detail than usual. The upfront numbers were reasonably handsome, as expected. Q4 Total Income was up 22% Y-o-Y and Net Profit was up 28% Y-o-Y. These numbers are on-par with what was expected from Yes Bank. But I have some interesting information from the details that I have studied.

Trailing-Twelve-Months Growth

Yes Bank's T-T-M Y-o-Y Growth has seen smart recovery post June'14 quarter. From levels of about 30% or higher until Sept'13, the growth rates fell to levels of about 15% by June'14. Incidentally, June'14 was also the quarter when Yes Bank had done a QIP issue, i.e. raised Capital by issue of fresh shares. This extra Capital in hand meant that the incremental growth was less dependent on borrowed funds and hence the Net Profit growth was faster than growth in Total Income. The T-T-M Net Profit growth is now rapidly approaching the 25% mark & is slated to cross it by June'15.

Look at the chart alongside, which shows Yes Bank's T-T-M Interest Cost as a Percentage of it's T-T-M Total Income. After remaining stable at around the 62% mark for quite a few quarters until June'14, the Bank's Interest Cost has sharply dropped to about 59% of it's Total Income by March'15. This is the primary reason why Yes Bank's Net Profit margins have improved from 13.84% in June'14 to 14.77% in March'15 and has helped the Bank's Net Profit grow faster than Total Income. Yes Bank has now taken board approval to raise further Capital upto $1 billion via issue of shares or ADRs/GDRs. As and when Yes Bank does this additional issue of Equity instruments, the Bank will be able to bring the Interest Cost % further down to levels closer to 50% mark, where most larger banks like ICICI and Axis operate at.

( Click Here for Yes Bank's Results Summary Page. )

Digging into further details, I have found some more interesting information. Yes Bank has been primarily dependent on it's Treasury Operations & Wholesale (or Corporate) Banking business to drive it's Top-line as well Bottom-line until recent quarters. Until about 2-3 years ago, Yes Bank barely had 100 branches based in the Top-50 cities of India. But the Bank has been expanding it's Retail Branch network over the recent 2-3 years and now has 630 branches in 375+ cities across India. So, on one side Yes Bank continued to grow it's knowledge-based Corporate Banking business and on the other side the expanding branch network was increasing it's access to lower-cost deposits, also called as CASA (Current Account, Savings Account) Deposits. Still about 93% of Yes Bank's Total Income comes from it's Treasury & Corporate Banking operations. Retail Banking contributes less than 7% of it's Top-line, but over the recent quarters, it has been posting faster growth rates than other segments of operations. Have a look at the charts below. I have shown the T-T-M Income progress from Yes Bank's 3 Operating segments, T-T-M Profits progress from the Treasury & Corporate Banking operations:

As we can see, Yes Bank's Income from Corporate Banking segment is much larger than other segments and has been growing at a very steady pace. Infact the Y-o-Y growth rates of this segment are very steady around the 23% mark, which is a very healthy pace of growth. But the profits from this segment have started plateauing over the recent quarters. Here is where the Treasury operations are kicking in. Even though the Income from Treasury operations are volatile within a range, the Profits from this segment have been posting healthy growth over the last 3-4 quarters. Now look at the Retail Banking Revenues chart. This segment posted a very modest Y-o-Y growth of just 16% in March'14, but the growth rates have accelerated handsomely over the last 4 quarters and now stands at over 53%. Eventhough the base is very small for Retail Banking at the moment, but the growth has just started and could continue to accelerate for many more quarters. Yes Bank's Retail Banking division is still making small losses, but will turnaround & start posting profits in the next 4-6 quarters as the newly established Branches start maturing. Any new Branch will need atleast 2-3 years to breakeven and start posting profits. As most of Yes Bank's branches are less than 2 years old, they are still to reach breakeven level.

The Capital Employed figure for Retail Banking division of any Bank is negative because the Bank receives huge amounts of Retail Deposits, which is then used to Lend to other sectors. As we can see, Yes Bank's Capital Employed for Retail Banking has gone up from Rs.-9200 crores in March'13 to over Rs.-19500 crores by March'15, despite a sharp increase in the Operating Costs associated with this division. This negative Capital Employed number will continue to expand in the coming years as the Bank's Branch network expands and more & more of these branches mature.

Valuations: Yes Bank's stock is trading around the Rs.820 levels currently and it's T-T-M EPS stands at a little over Rs.48/-, translating into a P/E ratio of about 17. I think this valuation is fairly attractive from an Investment Point of view as Yes Bank is expected to continue growing at a decent pace over the long term. There will be an Equity Dilution happening when the Bank issues fresh shares to raise more Capital, but it will ultimately help the Bank in posting stronger Growth & improve it's margins. The blip in EPS will only be temporary. I think every dip in Yes Bank's share price is an opportunity to invest for long term investors.

Yes Bank vs Indusind Bank comparison - Last 1 year progress update

About 1 year ago I had posted a comparison of Yes Bank vs Indusind Bank. Those who haven't read that, I would request them to go through it at the following link:

Yes Bank vs Indusind Bank comparison - 4th March'2014.

I had compared the 12-month figures (Jan to Dec) for the years 2009 onwards for Total Income, Interest Expense and EPS of the 2 mid-size private sector banks and then compared the same with their respective share prices. Now we have data for the year 2014 as well to add to the comparison. Have a look at the chart below:

As we can see, the status is almost similar to what it was a year ago. At the end of December'2014, Yes Bank's Total Income & Net Profit continue to be higher than Indusind Bank's numbers by about 10-11%, while the Interest Cost is higher by about 23% for Yes Bank and EPS is higher by 29%. But Yes Bank's share price continues to trail Indusind Bank's share price even now. With Yes Bank soon to be a part of the Nifty Index, we could see it's share price getting more attention from FIIs.

Eventhough Yes Bank continues to be larger than Indusind Bank on all operational numbers like Total Income, Interest Cost, Net Profit & EPS, while the latter commanding a substantially higher Market Cap, it is also interesting to see how the growth rates have panned out in the last 1 year, compared to previous years. On the Total Income front, Yes Bank had posted comparatively stronger growth rates during each of the 4 years from 2010 to 2013, but Indusind Bank has posted a stronger growth at 20% in the year 2014, compared to the former's growth of just 14%. On the Interest Cost front too, Yes Bank had grown faster in 3 out of the 4 years upto 2013, but again Indusind Bank has grown faster in 2014 at 17% compared to 11% of the former. There are 2 reasons for this: (1) Yes Bank raised substantial capital via issue of shares during the year; (2) Yes Bank's slower business growth (despite extra capital in hand) meant that it needed to borrow less incremental capital.

The slower growth in Interest Cost during most of the last 5 years has helped Indusind Bank post stronger growth rates on the Net Profit & EPS front. In the year 2014, Indusind Bank's Net Profit grew 28% compared to 22% growth posted by Yes Bank. Indusind Bank has posted substantially stronger growth rates for Net Profit in 4 of the last 5 years compared to Yes Bank. Maybe that is also one reason why Indusind Bank commands a higher valuation rating. Look at the P/E Ratios comparison. Indusind Bank has always traded at a substantial premium valuation compared to Yes Bank. Going forward it will be interesting to see how their growth rates pan out & the corresponding changes in their valuations. Currently both banks are well capitalised and can easily raise resources whenever needed. Both banks are getting aggressive in expanding their retail operations. Indusind Bank even has a Celebrity (actor Farhan Akhtar) endorsing it. With the economy picking up pace, the Banking industry will continue to see increased activity. And with the Govt. taking steps to discourage Cash transactions & encourage electronic transactions, all Banks will see a surge in number of transactions. The Banks with strong Technological platform will be the biggest beneficiaries.