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MOSL: YES BANK (Buy)-Stellar all-round performance

Yes Bank: Stellar all-round performance

(YES IN, Mkt Cap USD12.2b, CMP INR1713, TP INR2123, 24% Upside, Buy)

• Yes Bank's (YES) NII grew 45% YoY (+10% QoQ) to INR18.1b, helped by 30bp YoY NIM improvement (to 3.7%) and customer assets growth of 32% YoY (+5% QoQ). Strong NII and 13% beat on other income (+17% YoY) drove PPoP outperformance (+30% YoY; 6% beat). This was partly offset by higher-than-expected provisioning (INR1b of prudent provisioning), leading to PAT of INR9.1b (5% beat, 32% YoY).
  
• Asset quality improved during the quarter, with GNPA of 97bp v/s 1.52% in 4Q. In absolute terms, GNPA declined to INR13.6b. This includes one borrower with gross exposure of 0.26% (INR3.66b; down from INR9.11b in 4Q as the bank recovered INR5.46b on the account) and net exposure of 0.10% (INR1.38b). Specific provision held in this account is INR2.27b. Total net stressed loans stood at 1.6% of advances.
  
• Deposits grew 5%/23% QoQ/YoY to INR1.5t, led by continued CASA inflows. Strengthening of liability franchise continued, with CASA ratio improving 50bp QoQ to 36.8%, helped by 66.7%/45.8% YoY growth in CA/SA deposits.
  
• Other highlights: a) NIM improved 10bp QoQ, helped by capital raise benefit. b) Loans grew 32% YoY to INR1.4t. c) Retail fee income showed robust growth of 45% YoY. d) RWA/TA declined 300bp+ QoQ to 83% and CET 1 ratio improved 50bp QoQ to 11.9%.​