Yes Bank - 1QFY2014 Result Update

7/27/2019 Yes Bank - 1QFY2014 Result Update

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Please refer to important disclosures at the end of this report 1

Particulars (` cr) 1QFY14 4QFY13 % chg (qoq) 1QFY13 % chg (yoy)NII 659 638 3.3 472 39.6Pre-prov. profit 680 634 7.3 460 47.9

PAT 401 362 10.7 290 38.2Source: Company, Angel Research

Yes Bank reported a strong operating performance during the quarter, which wason expected lines. NII expectedly grew by 39.6% yoy. Also, boosted by treasurygains of ~`95cr, non-interest income registered a higher-than-estimated growth of53.4% yoy, thereby aiding pre-provisioning profit growth of 47.9% yoy. Gross andNet NPA ratios remained largely stable at 0.22% and 0.03%, respectively. The bank

used the opportunity created by higher trading gains to make floating provisions of`75cr and as a result provisioning expenses more than tripled on a yoy basis,bringing bottom-line growth to a still strong 38.2% yoy.

Business growth robust; NIMs stable qoq: During the quarter, the bank registereda robust business growth, as its advances and deposits grew by 24.3% and 29.9%yoy, respectively. Customer Assets (loans & credit substitutes) grew at a robustpace of 24.2% yoy. CASA deposits grew by 61.1% yoy, thereby taking the CASAratio to 20.2% up from 16.3% a year ago. Savings deposits rose by 120.6% yoyand 9.9% qoq to `6,622cr. NIMs remained stable sequentially at 3.0%. Thebanks non-interest income grew strongly by 53.4% yoy to `442cr, as incomefrom Financial markets segment more than tripled on a yoy basis. During thequarter, the slippages remained low at `25cr (annualized slippage rate of 0.2%).Restructured advances remained under check at 0.29% of gross advances.

Outlook and valuation: Overall, the bank has performed well so far on the assetquality front, with credit costs contained at ~35bp for FY2013. However goingahead, as per the managements guidance of 50-60bp credit costs for currentfiscal and adversely labeled assets at ~1-2% of loan book, a significant increasein provisioning costs for the bank can be expected from the current levels.

Recent liquidity tightening measures expose Yes Bank to margin pressures giventhe wholesale dominated funding nature of the bank. The Management hasreiterated its intent to hike lending rates to mitigate the impact, in case themeasures are not temporary in nature. Moreover, on its investment book, as perthe Management, currently almost the entire Gsec book is at HTM, therefore noimmediate MTM impact, while the net MTM impact on aggregate basis on thecorporate bond portfolio is largely nil.

At CMP, after the sharp correction recently, the stock trades at a relatively moremoderate valuation of 1.6x FY2015E ABV. However, we would prefer to wait andwatch macro developments in the near term, before we revisit our outlook and ratingon the stock. Currently, we maintain our Neutral rating on the stock.Key financialsY/E March (` cr) FY2012 FY2013 FY2014E FY2015ENII 1,616 2,219 2,877 3,595% chg 29.6 37.3 29.7 24.9

Net profit 977 1,301 1,539 1,777% chg 34.4 33.1 18.3 15.5

NIM (%) 2.6 2.7 2.7 2.8

EPS (`) 27.7 36.3 42.9 49.5P/E (x) 13.9 10.6 8.9 7.7

P/ABV (x) 2.9 2.4 1.9 1.6

RoA (%) 1.5 1.5 1.4 1.3

RoE (%) 23.1 24.8 23.9 22.8

Source: Company, Angel Research, CMP as of July 24, 2013

NEUTRALCMP `383

Target Price -

Investment Period -

Stock Info

Sector

Bloomberg Code

Shareholding Pattern (%)

Promoters 25.6

MF / Banks / Indian Fls 16.6

FII / NRIs / OCBs 46.5

Indian Public / Others 11.3

Abs. (%) 3m 1yr 3yr

Sensex 4.8 18.8 10.8

YES (22.5) 12.3 27.0

Banking

Market Cap (`cr) 13,790

Beta 1.2

52 Week High / Low 547/322

Avg. Daily Volume 315,039

Face Value (`) 10

BSE Sensex 20,091

Nifty 5,991

Reuters Code YESB.BO

YES@IN

Vaibhav Agrawal022 3935 7800 Ext: 6808

[email protected]

Sourabh Taparia022 3935 7800 Ext: 6872

[email protected]

Harshal Patkar022 3935 7800 Ext: 6847

[email protected]

Yes BankPerformance Highlights

1QFY2014 Result Update | Banking

July 25, 2013


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Yes Bank | 1QFY2014 Result Update

July 25, 2013 2

Exhibit 1:1QFY2014 performance summary (standalone)Particulars (` cr) 1QFY14 4QFY13 % chg (qoq) 1QFY13 % chg (yoy) FY2013 FY2012 % chgInterest earned 2,398 2,288 4.8 1,886 27.1 8,294 6,307 31.5- on Advances / Bills 1,520 1,465 3.7 1,247 21.8 5,397 4,427 21.9- on investments 874 814 7.4 630 38.7 2,859 1,847 54.8

- on balance with RBI & others 2 3 (24.0) 4 (48.2) 17 23 (29.0)

- on others 2 5 (68.5) 5 (65.6) 21 10 104.1

Interest Expended 1,739 1,650 5.4 1,414 23.0 6,075 4,692 29.5Net Interest Income 659 638 3.3 472 39.6 2,219 1,616 37.3Other income 442 379 16.5 288 53.4 1,257 857 46.7- Financial markets 174 72 143.2 47 269.6 252 183 38.1

- Financial advisory 144 166 (13.3) 120 20.1 550 363 51.4

- Transaction banking 88 93 (5.3) 80 10.8 323 237 36.2

- Retail and others 37 49 (25.5) 31 19.3 132 74 78.2

Operating income 1,101 1,018 8.2 760 44.8 3,476 2,473 40.6Operating expenses 421 384 9.8 301 40.1 1,335 933 43.1- Employee expenses 201 174 15.5 155 29.6 656 475 38.0

- Other Opex 220 209 5.0 145 51.3 679 457 48.5

Pre-provision Profit 680 634 7.3 460 47.9 2,142 1,540 39.1Provisions & Contingencies 97 98 (0.6) 30 223.2 216 90 139.4

PBT 583 536 8.7 430 35.7 1,926 1,450 32.8Provision for Tax 182 174 4.6 139 30.6 625 473 32.1

PAT 401 362 10.7 290 38.2 1,301 977 33.1Effective Tax Rate (%) 31.2 32.5 (124)bp 32.5 (122)bp 32.5 32.6 (0.5)

Source: Company, Angel Research

Exhibit 2:1QFY2014 Actual vs. estimatesParticulars (` cr) Actual Estimates Var. (%)Net interest income 659 670 (1.7)

Other income 442 383 15.4

Operating income 1,101 1,053 4.5Operating expenses 421 394 6.9

Pre-prov. profit 680 659 3.1Provisions & cont. 97 87 11.6

PBT 583 572 1.9Prov. for taxes 182 195 (6.4)

PAT 401 378 6.1Source: Company, Angel Research


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July 25, 2013 3

Exhibit 3:1QFY2014 performance analysis (standalone)Particulars 1QFY14 4QFY13 % chg (qoq) 1QFY13 % chg (yoy)Balance sheetAdvances (` cr) 47,898 47,000 1.9 38,534 24.3Deposits (`cr) 65,225 66,956 (2.6) 50,208 29.9

Credit-to-Deposit Ratio (%) 73.4 70.2 324bp 76.7 (331)bp

Current deposits (`cr) 6,542 6,665 (1.8) 5,169 26.6

Savings deposits (` cr) 6,622 6,023 9.9 3,001 120.6

CASA deposits (`cr) 13,163 12,688 3.7 8,170 61.1

CASA ratio (%) 20.2 18.9 123bp 16.3 391bp

CAR (%) 17.6 18.3 (70)bp 16.5 110bp

Tier 1 CAR (%) 9.7* 9.5 20bp 9.2 50bp

Profitability Ratios (%)Yield on advances 12.3 12.4 (10)bp 12.4 (10)bp

Cost of funds 8.3 8.4 (10)bp 9.0 (70)bp

Reported NIM 3.0 3.0 0bp 2.8 20bp

Cost-to-income ratio 38.3 37.7 55bp 39.5 (130)bp

Asset qualityGross NPAs (`cr) 105 94 11.2 110 (4.2)

Gross NPAs (%) 0.2 0.2 2bp 0.3 (6)bp

Net NPAs (` cr) 12 7 72.8 24 (49.0)

Net NPAs (%) 0.03 0.01 2bp 0.1 (3)bp

Provision Coverage Ratio (%) 88.5 92.6 (410)bp 78.4 1013bp

Provisions to avg. assets (%) 0.4 0.4 (3)bp 0.2 23bp

Source: Company, Angel Research, *Note including 1QFY2014 profits

Robust growth in customer assets

During the quarter, the bank registered a healthy growth in its business, as

advances grew by 24.3% yoy, while deposits increased by 29.9% yoy. Customer

Assets (loans & credit substitutes) grew at a robust pace of 24.2% yoy. Within the

Customer Assets portfolio of the bank, the share of the Retail (including MSME)

portfolio increased from 15.8% to 18.0% now, while the share of the Corporate

portfolio (both large and mid corporate) declined from 84.2% to 82.0%.

CASA deposits grew by 61.1% yoy, thereby taking the CASA ratio to 20.2% as of1QFY2014, up from 16.3% as of 1QFY2013 and 18.9% as of 4QFY2013.

Savings deposits rose by 120.6% yoy and 9.9% qoq to `6,622cr. As a result of the

strong performance on the CASA front, retail liabilities as a proportion of total

deposits (CASA + retail term) have increased to 38.8% from 37.3% as of

1QFY2013 and 35.5% as of 4QFY2013.The Management targets to increase the

CASA ratio to 30%, and increase the share of retail deposits to total deposits to 55-

60% in the next two years.


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Exhibit 4:Advances and deposits growth trend


Exhibit 5:Customer Assets breakup as of 1QFY2014


Saving deposits continue to witness strong traction

Immediately post the savings rate de-regulation, the bank had aggressively hiked

its savings account interest rates, which is leading to a paradigm shift in the banks

franchise from a predominantly wholesale franchise to one that will increasingly

have much needed retail play as well.

Highlighting the strong traction, savings account deposits have grown by more

than six times on an absolute basis since the savings deposit rate deregulation in

October 2011. Even the share of retail deposits (CASA and retail term deposits)

has now risen to 38.8% of total deposits from 35.5% in the last quarter, thereby

reducing the banks dependence on higher costing bulk deposits. The share of

CDs to total deposits as of 1QFY2014 stands at 10.7%.

The bank has almost doubled its branch network in the past two years and has

aggressive network expansion plans (an addition of ~100 branches in the

remaining nine months of FY2014), which will further its aspirations of creating a

sustainable retail deposits franchise, as deposits density is relatively better in tier-I

locations, and also keep the bank well on track to meet its version 2.0 branch,

CASA, and other growth targets.

The bank has also incorporated a retail broking subsidiary to complement its current

retail offerings and enable cross selling of 3-in-1 savings accounts to its expanding

retail customer base.

16.4

15.2

22.9

18.6

22.3

20.2

23.7

36.2

24.3

29.9

-

10.0

20.0

30.0

40.0

50.0

Advances yoy growth (%) Deposits yoy growth (%)

1QFY13 2QFY13 3QFY13 4QFY13 1QFY14

63

19

18

Corp. and Insti. Banking Commercial Banking Branch Banking


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July 25, 2013 5

Exhibit 6:Strong CASA traction continues


Exhibit 7:CASA ratio improves 123bp sequentially


NIM stable qoq

The banks cost of funds dipped by 10bp sequentially to 8.3% during the quarter,

primarily on account of CASA traction. Yield on advances for the bank witnessed a

sequential decline of 10bp to 12.3%. Consequently, the NIM for the bank

remained stable sequentially at 3.0%.

Exhibit 8:Cost of funds declined largely on CASA traction


Exhibit 9:NIM remains stable qoq


Strong non-interest income growth during 1QFY2014

During 1QFY2014, the banks non-interest income grew strongly by 53.4% yoy to

`442cr, as income from the Financial markets segment more than tripled on a

yoy basis. The bank realized treasury gains of ~`95cr from sale of government

bonds in the quarter under review. Strong growth was witnessed in financial

advisory and retail fee income streams, which grew by 20.1% and 19.3% yoy,

respectively.

71.5

86.7

74.9 71.6

61.1

-

20.0

40.0

60.0

80.0


(%)

16.317.3 18.3

18.920.2

6.0

8.0

10.0

12.0

14.0

16.0

18.020.0

22.0


(%)

9.08.7

8.5 8.4 8.3

5.0

6.0

7.0

8.0

9.0


(%)

2.8

2.9

3.0 3.0 3.0

2.4

2.5

2.6

2.7

2.8

2.9

3.0

3.1


%


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July 25, 2013 6

Exhibit 10:Income from Financial markets segment more than tripledParticulars (` cr) 1QFY14 4QFY13 % chg (qoq) 1QFY13 % chg (yoy)Financial markets 174 72 143.2 47 269.6

Financial advisory 144 166 (13.3) 120 20.1Transaction banking 88 93 (5.3) 80 10.8

Retail and others 37 49 (25.5) 31 19.3

Other income 442 379 16.6 277 59.8


Stability maintained on the Asset quality front

During the quarter, the slippages for the bank remained low at `25cr (annualized

slippage rate of 0.2%). Gross NPAs for the bank remained largely stable at 0.22%

(on an absolute basis, up by 11.2% qoq). The bank used the opportunity created

by higher trading gains during the quarter to make higher provisions (provisioningexpenses almost tripled on a yoy basis). The Net NPA ratio at 0.03%, remained

well under check. Restructured advances remained under control at 0.29% of gross

advances.

Exhibit 11:Asset quality ratios amongst the best in industry


Network expansion continues; Cost ratios under controlThe bank added 45 branches in 1QFY2014, taking the total number of branches

to 475. It also added 100 ATMs in the quarter, taking the total number of ATMs to

1051. Going ahead, the bank has aggressive plans for network expansion, and is

planning to another 100 branches in the remaining nine months of FY2014. For

1QFY2014, the banks cost-to-income ratio came in higher sequentially, but

remains well under check at 38.3%. Further, even after considering significant

branch expansions plans, the Management expects to contain the cost-to-income

ratio below 40%.

110 103 76 94 10524 20 16 7 12

78

80 80

93

88

50

60

70

80

90

100

-

20

40

60

80

100

120


(`cr) Gross NPA Net NPA NPA coverage % (RHS)


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July 25, 2013 7

Exhibit 12:Steady branch network expansion continues


Exhibit 13:Cost ratios remain under control


Liquidity tightening measures, in case not temporary, exposebank to margin pressures

RBIs recent liquidity tightening measures, wherein they have capped the LAF

borrowing window to 0.5% of banks NDTL and have increased minimum daily

CRR requirement from 70% earlier to 99% now, would likely put pressure on

funding cost of banks (more for the wholesale funded banks). Yes Bank, though

has strategically transformed itself over the last few years from a predominantly

wholesale franchise to one that has much needed retail play as well, however, still

wholesale deposits form ~61% of total deposits. Consequently, the bank being

largely wholesale funded, remains exposed to margins pressures. As per the

Management, the net ALM mismatch for the bank upto the one-year maturitybucket prevails at ~`8,000-10,000cr, which is more front loaded. The

Management has reiterated its intent to hike lending rates to mitigate the impact,

in case these tightening measures are not temporary in nature.

381400 412

430

475

50

100

150

200

250

300

350

400

450

500


1.6 1.6 1.6 1.6 1.7

39.539.5

37.237.7

38.3

1.0

1.2

1.4

1.6

1.8

30.0

32.5

35.0

37.5

40.0

42.5


Opex to avg assets (%, RHS) Cost-to-income ratio (%)


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July 25, 2013 8

Investment arguments

Savings rates deregulation aiding retail customer acquisition

Yes Bank had aggressively hiked savings interest rates immediately post thederegulation, which is leading to a paradigm shift in the banks franchise, ie from

a predominantly wholesale franchise to one that will increasingly have a much

needed retail play as well.

Savings rate deregulation does not allow banks to offer differential rates to

different groups of customers. Hence, it would be unfavorable for larger players to

offer higher rates to their entire customer base just to protect some amount of

market share loss to competition from smaller players such as Yes Bank (more

than 33,000 branches and `8lakh cr savings deposits for large banks compared

to 475 branches and ~`6,600cr savings deposits for Yes Bank). While the loss in

market share for larger players would be minor, the gain for smaller banks, suchas Yes Bank offering higher savings rates, is expected to be significant, especially

considering the low bases of their retail franchises.

Yes Bank continues to experience strong traction in its savings deposits, with SA

deposits increasing by more than six times on an absolute basis since the savings

deposit rate deregulation in October 2011. Even going forward, we expect the

savings deposit accretion for the bank to remain robust, however, over the longer

term the opportunity available for banks like Yes Bank to gain market share in

savings deposits, could get reduced from the levels envisaged earlier, with the

likely entry of new players in the sector over the next couple of years down the line.

A-list Management and ability to raise capital

Yes Bank has an A-list top Management team, which brings to the table rich

experience from the best banks in India, including Bank of America, ABN AMRO,

Citibank, ICICI Bank, Rabo India and HDFC Bank. The banks performance also

benefits from the Managements ability to raise equity capital (at increasing,

book-accretive premiums).

Capital raising to be book accretive

The banks capital adequacy ratio (CAR) continues to be strong at 18.1%, with tier-

I ratio at 9.7% (including 1QFY2014 profits). With RoE of 25% in FY2013 andcontinued healthy profit run rate so far, the banks retained earnings itself are

capable of funding balance sheet growth of 18-20%. The Management had also

earlier approved a plan to raise US$500mn equity capital, the timing however

would remain subject to market conditions. Any capital raising for the bank is likely

to be book-accretive and will aid in further enhancing the bank's credit market

share going forward. We have not factored any capital raising in our estimates.


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July 25, 2013 9

Investment Concerns

Asset quality remains strong, but concerns ahead

The bank has maintained strong asset quality in spite of growing at a fast clip overthe past few years (credit costs contained at ~35bp for FY2013 and gross and net

NPA ratios at a marginal 0.22% and 0.03%, respectively, as of 1QFY2014), which

has been aided by the smaller size of its balance sheet so far. The banks PCR

(without including technical write-offs) remains strong at 88.5% as of 1QFY2014.

The bank has also been astute in managing its growth rate and asset-liability

durations, in-line with the changing external environment. Going ahead, the

Management has guided at credit costs for FY2014E to be in the range of

50-60bp and has indicated adversely labeled assets to the tune of 1-2% of

loan book, which is likely to reflect in significant increase in provisioning costs

for the bank from the current levels.

Medium-term downside risks to RoA

The banks credit market share has steadily increased on the back of a robust

credit CAGR of 31.8% over the past five years. The bank has so far managed to

source loans with relatively above-average profitability, keeping its NIM above

2.7% since FY2009 (and now at 3%), in spite of a CASA ratio of ~20%. Going

forward though, as the size of the balance sheet increases, we believe RoA

compression remains a risk to the bank. Having said that, the recent deregulation

of savings account rates and the consequent strong accretion of SA deposits for

Yes Bank are likely to aid in countering this impact to an extent.

Outlook and valuation

Yes Banks growth as well as its Managements track record has been impeccable

so far. On the liabilities side, the bank has a challenge to build a retail deposit

franchise, which involves significant execution risks. However, it has taken the

challenge head-on and has doubled its branch network over the past two years to

430 branches now. Significant network expansion coupled with aggressive interest

rate offering on the savings deposits has resulted in a sevenfold increase in savings

deposits base since the deregulation in October 2011. We expect the bank to

continue registering robust growth on the retail deposit franchise front, however,

with the likely entry of new strong players in the sector, the opportunity for marketshare gains could get reduced from the levels envisaged earlier.

Overall, the bank has performed well so far on the asset quality front, with credit

costs contained at ~35bp for FY2013. However going ahead, as per the

Managements guidance of 50-60bp credit costs for the current fiscal and

adversely labeled assets at ~1-2% of loan book, a significant increase in

provisioning costs for the bank could be expected from the current levels.

Recent liquidity tightening measures expose Yes Bank to margin pressures given

the wholesale dominated funding nature of the bank. The Management has

reiterated its intent to hike lending rates to mitigate the impact, in case the

measures are not temporary in nature. Moreover on its investment book, as per

the Management, currently almost the entire Gsec book is at HTM, therefore no

immediate MTM impact, while net MTM impact on aggregate basis on the

corporate bond portfolio is largely nil.


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July 25, 2013 10

At the current market price, after the sharp correction recently, the stock trades at a

relatively more moderate valuation of 1.6x FY2015E ABV. However, we would

prefer to wait and watch macro developments in the near term, before we revisit

our outlook and rating on the stock. Currently, we maintain our Neutral rating onthe stock.Exhibit 14:Key assumptionsParticulars (%) Earlier estimates Revised estimatesFY2014 FY2015 FY2014 FY2015Credit growth 26.0 28.0 26.0 28.0

Deposit growth 25.0 26.0 25.0 26.0

CASA ratio 24.4 28.2 25.2 29.2

NIMs 2.8 2.8 2.7 2.8

Other income growth 21.8 23.2 22.5 22.7

Growth in staff expenses 30.0 30.0 30.0 28.5

Growth in other expenses 32.5 30.0 33.5 28.5

Slippages 0.8 1.0 0.8 1.0

Source: Angel Research

Exhibit 15:Change in estimatesParticulars (` cr)

FY2014 FY2015Earlierestimates Revisedestimates Var. (%) Earlierestimates Revisedestimates Var. (%)

NII 2,919 2,877 (1.4) 3,638 3,595 (1.2)

Non-interest income 1,532 1,540 0.5 1,887 1,890 0.2Operating income 4,451 4,417 (0.8) 5,526 5,486 (0.7)Operating expenses 1,752 1,759 0.4 2,277 2,260 (0.8)

Pre-prov. profit 2,700 2,659 (1.5) 3,248 3,226 (0.7)Provisions & cont. 362 362 - 546 534 (2.2)

PBT 2,337 2,297 (1.7) 2,702 2,691 (0.4)

Prov. for taxes 794 758 (4.6) 919 915 (0.4)

PAT 1,543 1,539 (0.3) 1,784 1,777 (0.4)Source: Angel Research


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July 25, 2013 12

Company Background

Yes Bank is the youngest private sector bank in the country, promoted by

professional bankers. The bank started its operations in CY2004 and has been

growing at a scorching pace, focusing on niche assets to maintain profitable

margins and asset quality. The bank's thrust so far has been primarily on

wholesale banking operations for mid-size corporates. Now aiming for a higher

share of retail deposits, the bank has recently doubled its network to 430 branches

(targeting the urban affluent segment) and is planning to expand its network to

750-900 branches by FY2015.


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July 25, 2013 13

Income statement

Y/E March (` cr) FY09 FY10 FY11 FY12 FY13E FY14E FY15ENet Interest Income 511 788 1,247 1,616 2,219 2,877 3,595- YoY Growth (%) 54.6 54.1 58.2 29.6 37.3 29.7 24.9Other Income 435 576 623 857 1,258 1,540 1,890- YoY Growth (%) 20.6 32.3 8.3 37.5 46.7 22.5 22.7

Operating Income 946 1,363 1,870 2,473 3,476 4,417 5,486- YoY Growth (%) 36.9 44.1 37.2 32.2 40.6 27.1 24.2

Operating Expenses 419 500 680 933 1,335 1,759 2,260- YoY Growth (%) 22.7 19.5 35.9 37.2 43.1 31.8 28.5

Pre - Provision Profit 528 863 1,190 1,540 2,142 2,659 3,226- YoY Growth (%) 50.7 63.6 37.9 29.4 39.1 24.1 21.3

Prov. & Cont. 62 137 98 90 216 362 534- YoY Growth (%) 41.6 121.6 (28.2) (8.1) 139.3 67.8 47.5

Profit Before Tax 466 726 1,092 1,450 1,926 2,297 2,691- YoY Growth (%) 52.0 55.9 50.3 32.8 32.8 19.2 17.2

Prov. for Taxation 162 249 365 473 625 758 915- as a % of PBT 34.8 34.2 33.4 32.6 32.5 33.0 34.0

PAT 304 478 727 977 1,301 1,539 1,777- YoY Growth (%) 51.9 57.2 52.2 34.4 33.1 18.3 15.5

Balance sheetY/E March (` cr) FY09 FY10 FY11 FY12 FY13E FY14E FY15EShare Capital 297 340 347 353 359 359 359Reserves & Surplus 1,327 2,750 3,447 4,324 5,449 6,717 8,181

Deposits 16,169 26,799 45,939 49,152 66,956 83,695 105,455

- Growth (%) 21.8 65.7 71.4 7.0 36.2 25.0 26.0

Borrowings 2,189 2,564 3,333 9,343 14,148 18,381 22,727

Tier 2 Capital 1,513 2,185 3,358 4,813 6,774 6,604 6,439

Other Liab. & Prov. 1,405 1,745 2,583 5,677 5,419 6,784 8,355

Total Liabilities 22,901 36,383 59,007 73,662 99,104 122,540 151,516Cash Balances 1,278 1,995 3,076 2,333 3,339 3,766 4,745

Bank Balances 645 678 420 1,253 727 1,838 2,273

Investments 7,117 10,210 18,829 27,757 42,976 51,464 60,978

Advances 12,403 22,193 34,364 37,989 47,000 59,219 75,801

- Growth (%) 31.5 78.9 54.8 10.5 23.7 26.0 28.0

Fixed Assets 131 115 132 177 230 275 330

Other Assets 1,327 1,191 2,186 4,153 4,833 5,976 7,389

Total Assets 22,901 36,383 59,007 73,662 99,104 122,540 151,516- Growth (%) 34.8 58.9 62.2 24.8 34.5 23.6 23.6


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July 25, 2013 14

Ratio analysis

Y/E March FY09 FY10 FY11 FY12 FY13E FY14E FY15EProfitability ratios (%)NIMs 2.7 2.8 2.7 2.6 2.7 2.7 2.8Cost to Income Ratio 44.2 36.7 36.3 37.7 38.4 39.8 41.2

RoA 1.5 1.6 1.5 1.5 1.5 1.4 1.3

RoE 20.6 20.3 21.1 23.1 24.8 23.9 22.8

B/S ratios (%)CASA Ratio 8.7 10.5 10.3 15.0 21.3 25.2 29.2

Credit/Deposit Ratio 76.7 82.8 74.8 77.3 70.2 70.8 71.9

CAR 16.6 20.6 16.5 17.9 18.3 16.2 14.4

- Tier I 9.5 12.9 9.7 9.9 9.5 9.1 8.7

Asset Quality (%)Gross NPAs 0.7 0.3 0.2 0.2 0.2 0.5 1.0

Net NPAs 0.4 0.1 0.0 0.0 0.0 0.1 0.2

Slippages 0.9 0.9 0.2 0.2 0.6 0.8 1.0

Loan Loss Prov. /Avg. Assets 0.3 0.3 0.1 0.0 0.2 0.3 0.3

Provision Coverage 48.5 78.4 88.6 79.2 92.6 84.2 80.0

Per Share Data (`)EPS 10.2 14.1 20.9 27.7 36.3 42.9 49.5

ABVPS (75% cover.) 53.9 91.0 109.3 132.5 162.0 197.3 238.1

DPS - 1.5 2.5 4.0 6.0 6.5 7.5

Valuation RatiosPER (x) 37.5 27.3 18.3 13.9 10.6 8.9 7.7

P/ABVPS (x) 7.1 4.2 3.5 2.9 2.4 1.9 1.6

Dividend Yield - 0.4 0.7 1.0 1.6 1.7 2.0

DuPont AnalysisNII 2.6 2.7 2.6 2.4 2.6 2.6 2.6

(-) Prov. Exp. 0.3 0.5 0.2 0.1 0.2 0.3 0.4

Adj. NII 2.3 2.2 2.4 2.3 2.3 2.3 2.2

Treasury 0.7 0.3 (0.1) 0.1 0.2 0.1 0.1

Int. Sens. Inc. 3.0 2.5 2.3 2.4 2.5 2.4 2.3

Other Inc. 1.4 1.6 1.4 1.2 1.3 1.3 1.3

Op. Inc. 4.4 4.1 3.7 3.6 3.8 3.7 3.6

Opex 2.1 1.7 1.4 1.4 1.5 1.6 1.6PBT 2.3 2.5 2.3 2.2 2.2 2.1 2.0

Taxes 0.8 0.8 0.8 0.7 0.7 0.7 0.7

RoA 1.5 1.6 1.5 1.5 1.5 1.4 1.3Leverage 13.6 12.6 13.9 15.7 16.5 17.2 17.6

RoE 20.6 20.3 21.1 23.1 24.8 23.9 22.8


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Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

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Documents

Yes Bank - 1QFY2014 Result Update