Q3FY2019 Result Update | Banking
Jan 25, 2019
Yes Bank
BUY
CMP
`214
Performance Highlights
Target Price
`280
Particulars (` cr)
Q3FY19
Q3FY18
% chg (yoy)
Q2FY19
% chg (qoq)
Investment Period
12 Months
NII
2,666
1,889
41.17
2,418
10.29
Pre-prov. profit
1,990
2,002
-0.57
2,366
-15.89
PAT
1,002
1,077
-6.97
965
3.84
Stock Info
Source: Company, Angel Research
Sector
Banking
Amid a lot of uncertainties related to the search of new MD & CEO, Yes bank
Market Cap (` cr)
49,460
(YES) delivered below estimate numbers for Q3FY2019, with PAT down by 7% yoy.
Beta
1.1
On the operating front, the bank reported 41% yoy growth in NII led by robust
52 Week High / Low
404 / 147
loan growth and steady NIMs. Other important updates are (1) RBI approved the
Avg. Daily Volume
24,40,000
appointment of Mr Ravneet Gill as MD & CEO; (2) A board meeting is scheduled
Face Value (`)
10
on January 29, 2019 to finalize the interim transition.
BSE Sensex
36,195
Weak other income impacted PAT: Yes Bank's PAT declined primarily owing to
Nifty
10,849
lower other income 37%/39% yoy/qoq. Other income was impacted by treasury
Reuters Code
YESB.BO
looses and lower corporate banking fees.
Bloomberg Code
YES@IN
Loan growth moderates; CASA down to 33.3%: Loan book growth moderated to
42% yoy (+1.6% qoq), of which retail book increased by 83% yoy to constitute
Shareholding Pattern (%)
15% of total advances. Within various segments the largest growth was driven by
Promoters
19.8
auto loans. Deposits also grew moderately 30% yoy (flattish on qoq) due to decline
in government SA balance and lower CD. CASA deposits grew 13.5% you, while
MF / Banks / Indian Fls
21.6
the CASA ratio declined to 33.3%.
FII / NRIs / OCBs
36.2
Owing to IL&FS exposure, Asset quality & provisions declined: YES Bank has
Indian Public / Others
22.5
considered large part of IL&FS exposure as NPA, this led to increase in GNPA/NPA
by 33%/42% qoq to 2.1%/1.2% respectively. PCR declined 352bps qoq to 44.2%.
Downgrade of IL&FS exposure increased slippages by 40% qoq to `2,297cr. The
Abs. (%)
3m
1yr
3yr
RBI divergence report on asset quality would be key monitarable.
Sensex
6.3
0.1
47.8
Outlook & Valuation: With induction of Mr Ranveet Gill, management overhang is
Yes Bank
4.8
(41.4)
57.9
behind, however, re-rating from hereon will depend on clarity regarding strategy
of future business and capital raising plans. At CMP, YES trades at 1.55x FY20E
P/ABV, which we believe is strong credential of new DM and superior RoE, hence,
we recommend BUY with a Target Price of `280 over the next 12 months.
3-year price chart
500
Key financials (Standalone)
400
Y/E March (` cr)
FY16
FY17
FY18
FY19E
FY20E
300
NII
4,567
5,797
7,737
9,618
11,706
200
% chg
31
27
33
24
22
100
Net profit
2,539
3,330
4,225
4,244
4,513
0
% chg
27
31
27
0
6
NIM (%)
3.3
3.4
3.3
3.0
3.0
EPS ( Rs)
11
14
18
18
20
Source: Company, Angel Research
P/E (x)
19
15
12
12
11
Jaikishan Parmar
P/ABV (x)
3.6
2.3
2.0
1.8
1.5
Research Analyst
RoA (%)
1.7
1.8
1.6
1.2
1.0
022 - 39357600 Ext: 6810
RoE (%)
20
19
18
15
15
Source: Company, Angel Research, Note: CMP as of 24/01/19
Please refer to important disclosures at the end of this report
1
Yes Bank | Q3FY2019 Result Update
Exhibit 1: 3QFY2016 performance summary (standalone)
Particulars (` cr)
Q1FY18
Q2FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19
% qoq
% yoy
Interest Earned
4,654
4,800
5,070
5,743
6,578
7,231
7,959
10.1
57.0
on Advances / Bills
3,534
3,693
3,846
4,404
5,005
5,550
6,248
12.6
62.5
on investments
903
923
1,098
1,179
1,351
1,561
1,604
2.7
46.1
on balance with RBI & others
179
145
82
110
162
58
42
(28.5)
(49.5)
on others
37
40
44
50
60
62
65
4.4
48.0
Interest Expended
2,845
2,915
3,182
3,589
4,359
4,814
5,293
9.9
66.4
Net Interest Income
1,809
1,885
1,889
2,154
2,219
2,418
2,666
10.3
41.2
Other Income
1,132
1,248
1,422
1,421
1,694
1,473
891
(39.5)
(37.4)
Operating income
2,941
3,134
3,311
3,575
3,913
3,891
3,557
(8.6)
7.4
Operating Expenses
1,237
1,227
1,309
1,440
1,459
1,525
1,567
2.8
19.7
Employee expenses
546
563
533
547
591
594
625
5.3
17.2
Other Opex
691
664
776
893
868
931
942
1.2
21.4
Pre Provision Profit
1,704
1,907
2,002
2,135
2,455
2,366
1,990
(15.9)
(0.6)
Provisions & Contingencies
286
447
421
400
626
940
550
(41.5)
30.6
PBT
1,418
1,460
1,580
1,736
1,829
1,427
1,440
1.0
(8.9)
Provision for Taxes
453
457
504
556
569
462
438
(5.1)
(13.0)
Tax rate
32
31
32
32
31
32
30
PAT
966
1,003
1,077
1,179
1,260
965
1,002
3.8
(7.0)
Business Details (` cr)
Advance
1,39,972
1,48,675
1,71,515
2,03,534
2,14,720
2,40,000
2,43,885
1.6
42.2
YoY
32
35
46
54
53
61
42
Borrowing
38,302
44,830
56,302
74,894
78,790
1,01,660
1,07,691
5.9
91.3
Deposit
1,50,241
1,57,990
1,71,731
2,00,738
2,13,395
2,22,838
2,22,758
(0.0)
29.7
CA
18,773
19,966
22,604
28,826
28,333
25,941
29,538
13.9
30.7
SA
36,442
38,758
42,685
44,351
46,598
49,339
44,579
(9.6)
4.4
CASA
55,215
58,725
65,289
73,176
74,930
75,279
74,117
(1.5)
13.5
CASA %
37
37
38
36
35.1
33.8
33.3
(51)bp
(475)bp
Asset Quality
GNPA (` cr)
1,364
2,720
2,974
2,627
2,824
3,866
5,159
33.4
73.4
NNPA (` cr)
545
1,543
1,595
1,313
1,263
2,019
2,876
42.5
80.3
Gross NPAs (%)
0.97
1.82
1.72
1.28
1.31
1.60
2.10
50bp
38bp
Net NPAs (%)
0.39
1.04
0.93
0.64
0.59
0.84
1.18
34bp
25bp
PCR (Calculated, %)
60
43
46
50
55
48
44
(353)bp
(213)bp
Credit Cost (Annualised) Adv
0.82
1.20
0.98
0.79
1.17
1.57
0.90
(66)bp
(8)bp
Profitability ratios (%)
C/I
42.1
39
40
40
37.3
39.2
44.0
487bp
451bp
RoE
17
18
18
19
19
14
14
(1)bp
(358)bp
Yield on Advance
10.4
10.2
9.6
9.4
9.6
9.8
10.3
57bp
72bp
Cost of Fund
6.2
6.0
5.9
5.7
6.1
6.2
6.5
22bp
56bp
Spread
4.2
4.3
3.7
3.7
3.4
3.5
3.9
35bp
16bp
NIM Reported
3.7
3.7
3.5
3.4
3.30
3.30
3.30
0bp
(20)bp
Cal NIM
3.9
3.8
3.4
3.4
3.1
3.1
3.2
17bp
(19)bp
Source: Company, Angel Research
Jan 25, 2019
2
Yes Bank | Q3FY2019 Result Update
Exhibit 2: Asset Quality
Asset Quality
Q4FY17
Q1FY18
Q2FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19
Gross NPA
2,019
1,364
2,720
2,974
2,627
2,824
3,866
5,159
Net NPA
1,072
545
1,543
1,595
1,313
1,263
2,019
2,876
Gross NPA %
1.52
0.97
1.82
1.72
1.28
1.31
1.60
2.10
Net NPA %
0.81
0.39
1.04
0.93
0.64
0.59
0.84
1.18
Provision Coverage%
46.9
60.0
43.3
46.4
50.0
55.3
47.78
44.24
Restructured Advances %
0.36
0.24
0.08
0.05
0.04
0.00
0.08
0.09
Security Receipt (Net) %
0.73
0.69
0.94
1.06
0.92
0.82
0.85
0.71
Standard SDR
0.24
0.20
0.32
0.21
-
-
5:25 Refinancing
0.09
0.10
0.15
0.06
0.05
0.05
S4A
0.01
0.01
0.01
0.09
0.07
0.07
Total Stressed asset
2.24
1.63
2.54
2.40
1.72
1.53
1.77
1.98
Owing to IL&FS exposure Asset quality & provision declined Asset qualitys:
Absolute GNPA increased 33% qoq to `5,159cr, while NPA inched up by 42.5% to
`2,876cr with provision coverage declining by 353bps to 44% (Calculated). Total
net stressed loans (NNPA, OSRL, SDR, S4A, SR, 5:25) stood at 1.98%, increased
from 1.77% in Q2FY2019.
On the NCLT front, bank has minimal exposure to accounts in NCLT List 1 (0.01%
of Gross Advances) and List 2 (0.26% of Gross Advances).
Bank has aggregate funded exposure of `2,530cr to the IL&FS group, of which `
1,913cr is classified as NPA with 25% provisioning and `617cr continues to be
Standard with 15% provisioning. This led to increase in credit cost and spike in
GNPA. The only concern now remains regarding asset quality is RBI divergence
report.
SMA 2 outstanding exposures (accounts > `5cr and as per RBI CRILC reporting) as
on December 31, 2018 are at 0.19% of Gross Advances.
Jan 25, 2019
3
Yes Bank | Q3FY2019 Result Update
Income statement
Y/E March (` cr)
FY15
FY16
FY17
FY18
FY19E
FY20E
Net Interest Income
3,488
4,567
5,797
7,737
9,618
11,706
- YoY Growth (%)
28
31
27
33
24
22
Other Income
2,046
2,712
4,157
5,224
5,724
7,276
- YoY Growth (%)
19
33
53
26
10
27
Operating Income
5,534
7,279
9,954
12,961
15,342
18,982
- YoY Growth (%)
25
32
37
30
18
24
Operating Expenses
2,285
2,976
4,117
5,213
6,464
8,086
- YoY Growth (%)
31
30
38
27
24
25
Pre - Provision Profit
3,250
4,302
5,838
7,748
8,878
10,896
- YoY Growth (%)
21
32
36
33
15
23
Prov. & Cont.
339
536
793
1,554
2,544
2,900
- YoY Growth (%)
(6)
58
48
96
64
14
Profit Before Tax
2,910
3,766
5,044
6,194
6,334
7,996
- YoY Growth (%)
25
29
34
23
2
26
Prov. for Taxation
905
1,227
1,714
1,970
2,090
2,639
- as a % of PBT
31
33
34
32
33
33
PAT
2,005
2,539
3,330
4,225
4,244
5,357
- YoY Growth (%)
24
27
31
27
0.46
26
Source: Company
Balance sheet
Y/E March (` cr)
FY15
FY16
FY17
FY18
FY19E
FY20E
Equity
418
421
456
461
461
461
Reserve & Surplus
11,262
13,366
21,598
25,298
28,778
33,171
Networth
11,680
13,787
22,054
25,758
29,238
33,631
Deposits
91,176
1,11,720
1,42,874
2,00,738
2,48,705
3,01,107
- Growth (%)
23
23
28
41
24
21
Borrowings
26,220
31,659
38,607
74,894
1,00,357
1,19,425
Other Liab. & Prov.
7,094
8,098
11,525
11,056
12,783
16,297
Total Liabilities
1,36,170
1,65,263
2,15,060
3,12,446
3,91,084
4,70,460
Cash Balances
5,241
5,776
6,952
11,426
14,607
17,869
Bank Balances
2,317
2,442
12,597
13,309
16,854
20,618
Investments
43,228
48,838
50,032
68,399
87,641
1,07,213
Advances
75,550
98,210
1,32,263
2,03,534
2,54,417
3,05,301
- Growth (%)
36
30
35
54
25
20
Fixed Assets
319
471
684
832
1,124
1,375
Other Assets
9,516
9,526
12,532
14,946
16,441
18,085
Total Assets
1,36,170
1,65,263
2,15,060
3,12,446
3,91,084
4,70,460
- Growth (%)
25
21
30
45
25
20
Source: Company
Jan 25, 2019
4
Yes Bank | Q3FY2019 Result Update
Ratio analysis
Y/E March (` cr)
FY15
FY16
FY17
FY18
FY19
FY20
Profitability ratios (%)
NIMs
3.1
3.3
3.4
3.3
3.0
3.0
Cost to Income Ratio
41.3
40.9
41.4
40.2
42.1
42.6
RoA
1.6
1.7
1.8
1.6
1.2
1.2
RoE
21.3
19.9
18.6
17.7
15.4
17.0
B/S ratios (%)
CASA Ratio
0.23
0.28
0.36
0.36
0.36
0.36
Credit/Deposit Ratio
0.8
0.9
0.9
1.0
1.0
1.0
Asset Quality (%)
Gross NPAs
0.41
0.76
1.52
1.28
2.10
1.80
Gross NPAs (Amt)
313
749
2,018
2,626
5,342
5,495
Net NPAs
0.12
0.29
0.81
0.64
1.18
0.90
Net NPAs (Amt)
87
284
1,072
1,312
3,002
2,747
Credit Cost on Advance
0.45
0.55
0.60
0.76
1.00
0.95
Provision Coverage
72%
62%
47%
50%
44%
50%
Per Share Data (`)
EPS
8.7
11.0
14.5
18.3
18.4
23.3
BV
50.7
59.9
95.8
111.8
127.0
146.0
ABVPS (75% cover.)
50.7
59.6
93.7
109.6
120.9
141.3
DPS
1.8
2.0
2.4
2.7
3.3
4.2
Valuation Ratios
PER (x)
24.6
19.4
14.8
11.7
11.6
9.2
P/BV
4.2
3.6
2.2
1.9
1.7
1.46
P/ABVPS (x)
4.2
3.6
2.3
2.0
1.8
1.51
Dividend Yield
0.8
0.9
1.1
1.3
1.6
2.0
Note - Valuation done on closing price of 24/01/2019
Jan 25, 2019
5
Yes Bank | Q3FY2019 Result Update
Research Team Tel: 022 - 39357800
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Stock Exchange Limited, Metropolitan Stock Exchange Limited, Multi Commodity Exchange of India Ltd and National Commodity &
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been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in securities Market. Angel or its
associates/analyst has not received any compensation / managed or co-managed public offering of securities of the company covered
by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should
make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the
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Disclosure of Interest Statement
Yes Bank
1. Financial interest of research analyst or Angel or his Associate or his relative
No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives
No
3. Served as an officer, director or employee of the company covered under Research
No
4. Broking relationship with company covered under Research
No
Jan 25, 2019
6
