Yes Bank Q3FY13 Results Review - First Cut - Systematix

Yes Bank Ltd reported its Q3FY13 results. Reported Net Profit stood at Rs3.4 bn, an increase of 34.7% yoy and 11.8% qoq , which is 6.8% ahead of the our estimates. Outperformance at the PAT level have come from better margins, strong growth in other income as well as higher business growth

Following are the key highlights of the results:

- Interest Income grew by 26.7% yoy, which is 1.6% ahead of our estimates and NII too posted strong growth of 36.7% yoy - 4.8% ahead of our estimates. It seems that positive surprise on NII is more driven by improvement in the margins of the bank and higher business growth as well.

- Margins of the bank have improved by 10 bps qoq to 3%.

- Business growth healthy - Advances of bank posted healthy growth of 22.3% yoy and 4.4% qoq to Rs438.6 bn. Similarly, deposits too recorded growth of 20.2% yoy and 7.9% qoq to Rs564 bn. CASA ratio of the bank is at 18.3% registering growth of 75% yoy.

- Other income showed strong growth of 48.1% yoy and 13.2% qoq to Rs 3131.9 mn.

- C/I income ratio has come down to on qoq basis from 39.5% to 37.2%

- Provisioning & contingencies have increased exponentially by 154% yoy and 79% qoq to Rs569 mn.

- Asset quality performance improved - Gross NPAs in absolute terms declined by 26% qoq (up by 5.8% yoy) to Rs762 mn. In % terms, gross NPAs declined to 0.17% from 0.24% in the last quarter and PCR more or less remained stable at 79.6%.

- Overall, the bank posted good set of numbers on asset quality and core business.

- Currently, we have BUY rating on the stock with TP of Rs530.

Source : Equity Bulls

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