>YES BANK

Continues to impress with yet another quarter of strong results
Yes Bank’s reported PAT of Rs.290.1 cr in Q1FY13 resulting in a growth of 34.3% on a YoY basis and 6.7% on QoQ basis.


 Loan book growth moderates
Yes Bank loan book grew at 16.4% YoY and 1.4% on a QoQ basis in Q1FY13. Total Customer Assets (Loans + Credit Substitutes) grew by 32.4% to Rs 49,340 cr in Q1FY13. The bank expects to grow ~30-35% in its total customer assets. We have factored in growth of 34.5% for customer assets in FY13E and 25.7% in FY14E.


 CASA momentum continues
CASA deposits increased by 71.5% YoY and 10.5% QoQ to Rs 8,170 cr taking the CASA ratio to 16.3% in Q1FY13 up from 10.9% in Q1FY12. The Bank continues to witness increased traction in CASA on the back of enhanced Savings Rate offering and improvements in productivity. We expect CASA ratio to be at 17.5% and 18.4% in FY13E and FY14E.


 Cost to income ratio remains elevated
The bank added 25 new branches and added approximately 540 employees in Q1FY12 which resulted in higher operating expenses. The cost to income ratio stood fairly stable at 39.5% in Q1FY13 as compared to 39.8% in Q4FY12 and broadly within the Management’s targeted levels. We expect cost to income ratio to be at 39.3% and 39.2% for FY13E and FY14E.


 Non- interest income continues to impress
Non Interest Income grew a whopping 74.3% YoY and 8.2% QoQ to Rs 288.1 cr in Q1FY13. Financial Markets increased almost 2.5x to Rs 95 crs which has been the highest level since Q1FY10 primarily due to Rs 30 cr of treasury gain. Management does not expect these levels of growth to be sustainable going forward. We expect non-interest income to grow 29.7% and 27.3% for FY13E and FY14E.


 Asset quality remains stable
Gross NPA increased 30.6% QoQ to Rs.109.5 Cr in the quarter ended June 2012. Gross NPAs and Net NPAs stood at 0.28% & 0.06%, respectively as on June 2012. The bank’s restructured assets stood at 0.51% of gross advances at Rs 196.5 cr in Q1FY13. Provisioning coverage ratio of the bank (including technical write off) stood at 78.3% in Q1FY13. We expect Gross NPAs to be at 0.39% and 0.42% for FY13E and FY14E and Net NPAs to be at 0.07% and 0.08% for FY13E and FY14E.


To read report in detail: YES BANK


RISH TRADER