YES Bank Ltd. share price target

Yes Bank is India's fourth largest private sector Bank. The bank provides a range of services such as Corporate, Retail & SME Banking franchise, with a comprehensive product suite of Financial Markets, Investment Banking, Corporate Finance, Branch Banking, Business and Transaction...

Hard Transition, Long Time for Capital Raise. Downgrade to Sell The bank reported a loss as higher provision on early recognition of stressed assets led to a rise in credit cost. The new MD, Mr. Ravneet Gill appears to be poised to change the DNA of the bank and adopt his MNC experiences. The bank is likely slowing the corporate asset growth, due to capital constraints, and is realigning corporate products. The bank has also aggressively recognized stressed assets and is likely to continue to assess losses based on time value erosion. The bank is further likely to invest in...

Yes Bank's result for Q4FY19 under the leadership of new CEO was a reflection of management's shift towards conservative approach and re-building the credibility of the bank. It has reported a loss of Rs 1507 cr, largely due to higher provisioning made during the quarter. The bank has made contingent provision of Rs 2100 cr towards a loan book of Rs ~10000 cr (BB & below rated) which was identified as stressed. These assets come under the corporate segment and include 5-6 accounts from real estate, infra and media & telecom sector....

Other income declined 62% YoY to ~| 531 crore, due to a reversal in corporate fees and slowdown in treasury. Retail fees, however, continued to grow at a healthy pace of 17% YoY. Slower credit growth at 18.7% YoY & dip in margins by ~30 bps YoY to 3.1%, impacted NII trajectory. Operational performance took a hit with decline of 38% YoY in PPP to | 1323 crore. Pace of growth in advances slowed to 18.7% YoY to | 241499 crore. Growth in corporate, including large and mid-size, has seen a slowdown at 14.6% and 21.1%. Retail segment growth was strong at 62% YoY with proportion...

New management under the leadership of Mr. Ravneet Gill has embarked into a full blown kitchen sinking exercise. Bank has reported its biggest loss of Rs15bn in Q4FY19 attributable to elevated credit cost along with contingency provision. Lower credit growth, compression in NIMs and reversals in fee income could not provide help either. Management has highlighted additional stress of Rs100bn still standard. Management is targeting ROA of 1% by FY22. We have cut our earnings by 43% for FY20. We roll forward our valuations to FY21 and downgrade our rating to SELL with new target price...

However, the quarter witnessed a steep rise in provisions, where it increased 8x y-o-y and ~6x on a q-o-q basis to Rs. 3661.7 crore. Yes Bank has identified a stressed pool of ~ Rs 10,000 crores, against which it has taken additional contingent provisions of Rs 2,100 crore. Affected by accelerated additional provisioning and lower other income, the bank reported a loss of Rs...

Uphill task to regain investor confidence downgrade to SELL Yes Bank (YES) saw a dismal Q4FY19, posting its first-ever quarterly loss of Rs 15bn as the new leadership prudently built in a 20% contingent provision on Rs 100bn of potentially stressed exposure. Guidance disappointed as YES now expects to (a) attain 1% ROA in three years, (b) post lower long-term growth of 20-22%, and (c) incur credit costs of 125bps in FY20. We pare FY20E/FY21E earnings by ~40% on elevated provisions, higher opex and lower growth; cut our...

Yes Bank (YES) appears to have made a compelling statement to the market, to the investors and in particular to all its skeptics about its compliance practices in reporting bad loans. The Reserve Bank of India (RBI) has found 'nil' divergence in the asset classification and provisioning by YES for FY18. Importantly, this development comes after months of speculation on the magnitude of divergence that the bank was expected to report (the range was as high as the balance sheet size of some of the smaller banks), particularly after its MD & CEO was forced to step down by the RBI.

The bank has addressed the leadership uncertainty by announcing the appointment of Mr.Ravneet Singh Gill as its next MD&CEO.; Net Interest Income (Interest income less interest expense) grew by 41% YoY and PAT shown a de-growth of 7% YoY on account of 37% YoY decrease in fee and other income. Advances marked a growth of 42% YoY, with retail advances growth at 83%...