Views on Yes Bank 2QFY2016 Results: Angel Broking

Views of Mr. Vaibhav Agrawal (VP Research- Banking, Angel Broking) on Yes Bank 2QFY2016 Results:

"Yes Bank reported a healthy performance during the quarter with PAT growth of 26.5% yoy to INR 610.4cr, above our expectations. NII for the bank grew at healthy pace of 29.4% yoy, on account of strong growth in advances and Retail & CASA deposits. Reported NIM remained fairly stable at 3.3% as compared to 3.3% in 1QFY16. CASA Ratio improved to 25.5% from 22.5% a year ago, crossing 25% for the first time since the bank's inception. Savings deposits posted robust growth of 61.7% y-o-y thereby reflecting the bank's move towards retail portfolio. Advances jumped 29% yoy to INR 80,015.1cr which is a healthy number given the sluggish credit growth in the economy. Non Interest Income surged 22.2% largely led by growth in retail banking fees of 58.6% and forex and capital markets gains income growth of 75.3%. Operating expenses grew by 29.8% yoy led by growth in staff as well as other operating expenses. On the asset quality front, Gross NPA and Net NPA came in at 0.61% and 0.20% respectively in 2QFY2016 as compared to 0.46% and 0.13% in 1QFY2016. Restructured asset came in slightly higher at INR 569cr in 2QFY2016; this represents 0.71% of loans. Also the bank indicated that there has neither been any sale to ARC during the previous four quarters nor the bank has refinanced any loan through 5-25 route.

The bank's asset quality performance has held up well so far. Going forward, we have factored higher provisions and slippages given the bank's corporate exposure to metals and EPC. Even after factoring the higher provisions and slippages, we expect Yes Bank to deliver a CAGR of 20.2% in earnings for FY2015-17E. Currently the stock trades at 1.9x FY2017E ABV. We maintain BUY rating on the stock."

Shares of YES BANK LTD. was last trading in BSE at Rs.729.3 as compared to the previous close of Rs. 751.15. The total number of shares traded during the day was 262185 in over 7659 trades.

The stock hit an intraday high of Rs. 748 and intraday low of 719.05. The net turnover during the day was Rs. 191907696.

Source : Equity Bulls

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