Angel Broking - Yes Bank - RU3QFY2013 - Accumulate

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Rajesh Desai

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Jan 18, 2013, 6:28:57 AM1/18/13

Dear All,

Forwarding you the Result Update on Yes Bank for 3QFY2013 with an Accumulate recommendation and a Target Price of `576 (12 months).

During 3QFY2013, Yes Bank reported a strong performance, posting a net profit growth of 34.7% yoy, exceeding our estimates, due to higher-than-estimated growth in non-interest income, contributed largely by ‘financial advisory’ fees. Key positive takeaways from the results were strong momentum in savings deposits, maintenance of healthy asset quality and strong loan growth during the quarter. Yes Bank has taken the challenge of building a retail deposit base head-on, nearly doubling its branch network over the past two years to 412 branches now and aggressively increasing savings rate to 7% as a smart customer-acquisition strategy. In our view, the bank is in a sweet spot, wherein retail franchise growth is likely to remain strong as large banks cede some market share to it rather than offering higher savings rates to their entire customer base. Though retail growth prospects appear stronger now, it currently trades at a valuation of 2.6x FY2014E ABV, which in our view, offers decent upside from current levels. Hence, we recommend Accumulate on the stock with a target price of `576.

Kindly click on the following link to view the Report.

Yes Bank - RU3QFY2013

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With best regards,
Fundamental Advisory Desk
Angel Broking
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