Yes Bank - Beat on core earnings aids higher provisions - Edelweiss

Yes Bank's Q3FY13 PAT at INR3.42bn (up 34.7% YoY) surpassed our estimate. In spite of proactive provision of INR0.5bn towards Deccan Chronicle (net exposure now at INR0.3bn) beat at the NII level (up 36.7% YoY) and fee income acceleration (up 48% YoY) aided performance.

Good got better; led by recoveries and lower slippages, headline asset quality continued to impress with GNPA coming off from 0.24% to 0.17%, while restructured book is at mere 0.43%-NIL restructuring during the quarter. Saving bank balances surged 27% QoQ to propel CASA to 18.3% (10.3% in FY11)-a key beneficiary of the saving rate deregulation. We remain confident of management's ability to execute Version II strategy (30% CASA by FY15) and consequently tread the path of re-rating.

Maintain 'BUY' with target price of INR615.

Source : Equity Bulls

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