YES Bank Ltd. share price target

Yes Bank (YES) has reported Q1FY25 PAT of INR 5.0bn with stable NIM QoQ. While opex and credit costs declined QoQ, RoA was flattish due to lower other income (MTM loss).

Yes Bank (YES) has reported in-line Q4FY24 PAT of INR 4.5bn, with RoA rising to 0.5%. Loan growth was healthy at 5% QoQ but deposits growth was strong at 10% QoQ. Stock of net NPA and net SR improved sharply to 1.1% vs 1.7% QoQ and 2.4% YoY.

Analysts are not bullish on YES Bank stock, with a strong sell consensus and a target price of Rs. 15

YES Bank (YES) reported a muted set of Q2FY24 PAT at INR 2.25bn with 0.2% RoA (vs 0.4% QoQ), pulled down by pressure on margins and elevated slippages. The bank is progressing reasonably well on balance sheet parameters namely CET1, LDR, NNPA, SR, granularity, mix, CASA, etc.

YES Bank has reported weak Q1FY24 earnings with muted business growth, sequential NIM decline, rise in slippages / net NPAs and drop in PCR. Reported PAT came in at INR 3.425bn with annualised RoA at 0.4%. We remain concerned on the bank’s muted operating earnings (PPOP as % of assets at ~1.0% for FY23), where we see only gradual improvement going ahead (1.1-1.3% for FY24E-25E) due to relatively higher gestation period of retail businesses and intense competition.

YES Bank reported a mixed set of Q4FY23 earnings with healthy business growth, NIMs and improvement in headline net stress, though profitability (RoA at 0.2%) remained weak due to continued investment in franchise and retail orientation.

YES Bank’s (YES) earnings in Q3FY23 were weighed down by higher than anticipated provision related to ageing of stressed assets. Reported PAT plunged 66% YoY / 81% QoQ to Rs 0.52bn (much below I-Sec and consensus expectations). Nonetheless, operating profit growth of 16% QoQ / 25% YoY was better than estimates.

YES Bank (YES) has reported Q2FY23 PAT of Rs1.5bn, which was down 32% YoY and 51% QoQ.

YES Bank reported 50% YoY growth in PAT to Rs3.11bn (down 15% QoQ) in line with our estimate. Positively, earnings momentum primarily flowed from core business stabilisation with: 1) slippages being contained at <2.2%, credit cost at <40bps and net labelled exposure moderating a tad to 5.0%; 2) loanbook gathering pace with 14% YoY growth and retail + SME advances mix improving to 50.9% (towards target of 60%); 3) capping of treasury loss at Rs370mn.

For YES Bank, post the restructuring and management change, liabilities, governance, asset quality / credit cost and capital were the key priorities.

Yes Bank Ltd. Issue Open: July 15 July 17, 2020, Price Band: Rs. Rs. 12 - 13 (Discount of Rs 1 for the eligible employees of the bank), Issue Size: 11,538,461,538 eq shares (Including Employee reservation of 166,666,667 shares

FPO NOTE

Yes Bank Ltd. (YBL), a new generation private sector bank, was incorporated in November 2003 by Mr. Rana Kapoor and Mr. Ashok Kapur. However, the RBI superseded the Board of Directors of the bank and imposed a moratorium on YBL from March 05, 2020. Further, on March 13, 2020, the government had approved a bailout

Yes Bank reported its Q3FY20 numbers wherein the performance was impacted by a surge in slippages leading to a substantial erosion in networth (CET 1 at 0.6% as on December 2019). RBI has penned a restructuring plan entailing capital infusion of ~| 10000 crore by banking peers led by SBI. However, challenges in terms of liquidity (with moratorium being removed from March 18, 2020), asset quality, liability management and further capital for growth are expected to keep earnings under pressure. Huge dilutions are expected to keep growth in ABV muted....

The RBI and government of India have superseded Yes Bank's (YES) board and placed the bank under moratorium from 5 Mar 2020.

Yes Bank management was unable to raise capital to address its weak financial position. In anticipation of possible trigger of bond covenant and deposit withdrawals. RBI has taken control of the board for the next 30 days from 5th March to 3rd April with restrictions on operations. Shri Prashant Kumar, ex-DMD and CFO of State Bank of India has...

Stressed asset quality remains cause for concern Absolute GNPA and NNPA were at | 17134 crore and | 9757 crore, respectively. Its GNPA already surged 238 bps QoQ in Q2 to 7.39% while NNPA ratio had surged 144 bps QoQ to 4.35%. The GNPA and NNPA ratios can go above 10-11% soon as the risk in BBB/BB and below books is estimated to be closer to | 30000-40000 crore. If...

Loans & Advances declined 6.3% YoY, due to 15.0% decline in the Corporate Banking division representing 61.9% of total loans. Net interest margin (NIM) declined ~60bps YoY and ~10bps sequentially, due to higher cost of funds, fresh slippages and decline in loans. GNPA/NNPA ratio increased sharply to 7.4%/4.4% in Q2FY20 vs. 1.6%/0.8% in Q2FY19, as a result of increasing bad loans. Given the weakening asset quality, declining margins and loan volumes,...

Based on our analysis, total sensitive sector exposure is ~20% of portfolio while BB & below portfolio is at 14% and this makes us believe that stress is largely recognized. Higher the asset quality deterioration, higher would be the capital requirements of the bank going forward. In our view, even if the bank is able to raise capital, future profitability would be dependent on...