20 October 2016
2QFY17 Result Update | Sector:
Financials
BSE SENSEX
28,130
Bloomberg
Equity Shares (m)
M.Cap.(INR b)/(USD b)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val. (INR m)
Free float (%)
S&P CNX
8,699
YES IN
421.1
551.2/8.3
1,450/632
13/41/67
3,577
78.1
Yes Bank
CMP: INR1,309
TP: INR1,500 (+15%)
Buy
Stellar operating perf; CASA ratio breaches 30% for first time; RoEs of 21%+
Yes Bank’s (YES) 2QFY17 PAT grew 31% YoY to INR8b (in line with our estimate).
PPoP grew 36% YoY, led by robust balance sheet growth and continued
improvement in risk-adjusted margins. All-time high CASA ratio of 30.3% (strong
CASA growth of 53% YoY), controlled C/I ratio (~41%; -45bp QoQ) despite strong
expansion (branches/employees +36%/+46% YoY), and impeccable asset quality
(total stress loans stable QoQ at ~1%) were the key positives during the quarter.
Loans grew 4% QoQ (+38% YoY v/s +33% YoY in 1Q), led by strong growth in large
corporate business (+37% YoY and +5% QoQ; 67.9% of loans). Overall deposits
grew 29% YoY driven by stellar growth in SA deposits (+54% YoY); CASA ratio
improved 70bp QoQ to 30.3%.
Asset quality remained stable. Credit cost guidance for FY17 was revised down to
50-60bp from 50-70bp earlier. NSL ratio (NNPA + other forms of stress loans)
remained flat QoQ at ~1%. Provision coverage ratio was stable QoQ at ~65%.
Other highlights:
a) Refinanced one small account through 5:25 route with o/s
exposure of INR1b (9bp of loans) and sold one account to ARC; no SDR during the
quarter, b) CET1 stood at 9.7%, c) RWA/TA increased 115bp QoQ to 82.5%, d)
reported NIMs expanded 10% YoY to 3.4% (flat QoQ) and e) impressive RoA
expansion to 1.8% (+10bp QoQ/YoY).
Valuation and view:
With economic indicators turning positive, the bank is better
positioned with (1) higher branch presence (950 v/s 214 in FY11), (2) best-in-class
asset quality and (3) low market share of ~1.1%. With higher share of bulk
liabilities and corporate investment portfolio, YES would continue benefiting from
a falling interest rate cycle. We largely maintain our earnings estimates with
superior RoA of 1.7% and RoE of 21%+ Reiterate
Buy
with a target price of
INR1,500 (3x September 2018 BV) – based on residual income model.
Financials & Valuation (INR b)
Y/E March
NII
OP
NP
NIM (%)
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoA (%)
Payout (%)
Valuations
P/E(X)
P/BV (X)
P/ABV (X)
Div. Yield (%)
21.7
4.0
4.0
0.8
16.9
3.4
3.4
1.0
13.1
2.8
2.8
1.3
2016 2017E 2018E
45.7
43.0
25.4
3.4
60.4
25.8
59.1
56.5
32.6
3.5
77.4
28.2
75.6
71.6
42.1
3.6
100.0
29.2
468.7
462.3
23.3
1.8
20.3
327.8 389.1
19.9
1.7
19.1
21.6
1.8
20.3
ABV/Sh.(INR) 323.4 383.7
Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com);
+91 22 3982 5415
Sunesh Khanna
(Sunesh.Khanna@MotilalOswal.com); +9122 61291540
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Yes Bank
Exhibit 1:
YES Bank: Quarterly performance v/s expectation
Y/E MARCH (INR m)
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
2QFY17A
14,462
30
8,879
23,340
9,481
13,860
36
1,617
12,243
4,228
8,015
31
2QFY17E
13,907
25
8,900
22,807
9,148
13,659
34
1,966
11,693
3,742
7,951
30
Var. (%)
4
0
2
4
1
-18
5
13
1
Credit cost lower than expected
Comments
Strong loan growth and margins improvement driving beat
In line with estimates
Source: MOSL, Company
NIM remains stable QoQ to 3.4%
Reported NIM remained stable QoQ to 3.4%. Overall customer assets growth
remained strong at 36% YoY (+4% QoQ) v/s 30% YoY in 1QFY17.
Loans grew by 38% YoY (v/s 33% YoY in 1Q), led by strong growth in corporate
banking (37% YoY, +5% QoQ). Share of Retail and Business Banking improved
YoY (32.1% of total advances v/s 31.8%) however, declined QoQ (32.5% in 1Q).
Strong non-interest income growth led by corporate banking fees
Non-interest income witnessed broad based growth of 44% YoY (+1% QoQ).
Forex and trading income grew 96% YoY and 48% QoQ to INR3b (34% of non-
interest income) largely led by strong trading gains during the quarter. Retail
fees increased 44% YoY (+18% QoQ)
Exhibit 2:
Strong growth traction in forex and retail fees
Non interest income
Corporate trade and CMS
Forex, debt capital and Securities
Corporate banking fees
Retail fees
Trade and Remittance
Facility/Processing fees
Third party sales
Interchange fees
General Banking
2QFY17
8,879
1,034
2,992
2,757
2,096
719
227
277
456
415
1QFY17
9,005
1,112
2,023
4,096
1,774
709
164
222
369
310
QoQ Gr. (%)
-1
-7
48
-33
18
1
38
25
24
34
2QFY16
YoY Gr. (%)
6,181
44
1,009
2
1,523
96
2,197
25
1,452
44
498
44
177
28
213
30
259
76
304
37
Source: Company, MOSL
CASA ratio at an all-time
high; crosses the 30% mark
for the first time
SA growth remains strong; CASA ratio at an all-time high of 30.3%
SA deposits grew 54% YoY (+2% QoQ). Proportion of SA deposits increased by
320bp YoY to 20.1%, although it declined ~40bps on a QoQ basis. CA deposits
grew 17% QoQ (+52% YoY) – led by one off float at the end of the quarter.
Management efforts in building granular liability book is showing fruits as the
share of retail deposits has increased to 56.5% from 55.3% a quarter ago and
52.5% a year ago.
20 October 2016
2

Yes Bank
Overall CASA showed robust growth of 53% YoY. Resultantly, CASA ratio
breached the 30% levels, improving 480bp YoY to 30.3% as compared to 23.4%
in 2QFY16 and 29.6% in 1QFY17.
Net stressed loans remain
one of the lowest in the
industry (75bp)
No SDR in 2QFY17; NSL ticks lower to 75bp
Asset quality performance continues to be strong with GNPA% and NNPA % at
83bp (+4bp QoQ) and 29bp (stable QoQ).
There was one account refinanced under 5:25 scheme with o/s exposure ~INR1b
(9bp of loans). There was no instance of additional SDR during the quarter.
One account was sold to an ARC during the quarter. Stock of security receipts
increased 4bp QoQ to INR2.6b (23bp of loans).
Outstanding standard restructured loan portfolio moderated QoQ at 46bp (v/s
49bp in 1Q). In absolute terms, OSRL decreased by INR115m.
Overall net stress loans ticked lower QoQ at 75bp (v/s 78bp a quarter ago) –
remains one of the lowest in the industry.
Provision coverage ratio improved QoQ at ~65% (+6bp QoQ).
Other highlights
During the quarter, YES added 50/76 branches/ATMs increasing the
branch/ATM network to 950/1,756.
RWA grew 7% QoQ (+32% YoY) v/s customer assets growth of 4% QoQ (36%
YoY); CET I capital stood at 9.7% (Total CAR at 15% v/s 15.5% in 1QFY17).
20 October 2016
3

Yes Bank
2QFY17 Conference call highlights
Macro commentary
Partial rollout of the disbursements by the 7th pay commission should improve
consumption demand in the economy
Expect GDP growth of 8.1% in FY17
Tax revenue continues to be buoyant and fiscal deficit should settle around 3.5%
of GDP, CA deficit 0.7%; both at multi year lows
BOP expecting USD20b surplus in FY17
Inflation is likely to undershoot the 5% target. 2nd consecutive year where
inflation has been within the target framework; may give headroom to RBI to
reduce another 25bp in the short term
Asset Quality
Slippages at the gross level amounted to INR3b , Net slippages amounted to
INR1.8b; Most of the stress and slippages have primarily accrued in the mid
corporate space (constituting 80-90% of slippages)
Trend of moderation in restructured advances to continue
In relation to exposures to iron & Steel and EPC, the underlying portfolio is
showing improvement
ARC sale: asset costing INR1b sold for INR0.6b – SR book has increased by 4bp to
INR2.6b (23bp of gross advances)
P/L related
Credit cost guidance – 50-60bp for the year.
Provision for NPA at INR1.15b
Purchased INR 700-800 cr of PSL certificates, Costs will anchor around 2-3%;
38% PSL fulfillment currently
Bank is seeing productivity gains, margin expansion and operating leverage
which is helping to keep costs in check while still maintaining a healthy pace of
growth
Business strategy
Target proportion for FY20 - retail and SME - 45%, corporate - 55%
In corporate banking, YES is looking to become mainstream bankers to the
larger corporates going forward as the banks pricing has become more
competitive.
In the SME business the bank’s focus is on asset backed secured lending . The
bank may tweak the mix between service and manufacturing sector.
Commercial retail is to be the driver of growth in the next few quarters.
Complete consumer retail product offering has now been fully launched.
However, it is the latter part of the next 4 years, where this particular segment
will witness a pick-up in growth.
Balance Sheet related
CA deposits had the benefits of additional float funds towards the end of the
quarter.
The bank aims to increase the proportion of [CASA+ retail term deposits] to 70-
75% of overall deposits by FY20
Cost of deposits 6.8%; Cost of SA: 6-6.5%
20 October 2016
4

Yes Bank
36% of borrowings in foreign currency –completely hedged (including natural
hedging); green and infrastructure bonds constitute 10% of borrowing
Credit substitutes –INR 106b for Sept, INR111b for June
Pricing benefits to be seen in this quarter from lowering of SA deposit rates;
rates were lowered at the beg of Sept.
International book at $700m all built up in the last 11 months. This has the
benefit of lower/no tax structure. However, this may not be a permanent thing.
New to bank customers in SA – monthly run rate 40-50k; On incremental basis,
new savings account customer acquired - Salary 40%, non-salary 60%. However,
a salaried customer generates more value since this segment involves cross sell
and full boutique of products.
Capital
Continue to generate strong internal capital, hence, a 20% YoY growth is largely-
self sustained. All permits and approvals to raise further capital are valid till Sept
17.
RWA – inching up due to a) inc in market risk - regulatory ask has increased, and
b) increase In loan mix vs investments, since advances attract higher risk weights
Digital Quotient
UPI has been launched. 1st bank to create UPI app for e-commerce players.
Already witnessed a million downloads.
IRIS and EMV ready solutions launched in partnership with ‘lastmile.mobi’
Reiterate Buy with a
target price of INR1,500
(3x September 18 BV)
Valuation and view
YES has navigated well even during the toughest period of economic
environment. Even in 1HCY16 when entire industry
was
passing through asset
quality litmus test, YES performance
was
impeccable (~1% stress loan including
NNPA+OSLR+SDR+5:25+S4A remains one of the lowest in the industry). With the
continued investment in franchise, people and processes, YES is well positioned
to leverage on to the opportunity that Indian economy presents. Bank has
strong capitalization (CET I of ~9.7%), branch network has increased to 950 v/s
214 in FY11 (to reach 2500 by 2020) and employee strength is up to 18531 v/s
3929 in FY11.
Comfortable liquidity, low inflation and bulk deposit rate is a significant positive
for YES from NIMs (higher short term liabilities) and bond gains perspective
(~9% share of corporate bonds in customer assets). Stable/improving NIM and
traction in fees will keep core PPP/ earnings CAGR strong at ~27%/25% over
FY16/19E despite strong investments in building liability franchise.
YES has a well-laid strategy for growing small business loans (most of which
qualify as priority sector loans) and cross-selling to acquired customers which
would help granular retail fees growth. On balance-sheet front, initial focus of
the bank will be on growing the liability side first and as customer relationships
age, focus would be on cross-selling its retail assets. The bank has been
expanding its branch network at an increasing pace.
Asset quality performance remains impeccable; however we conservatively
factor in higher credit cost of 0.65% over FY16-19. This is expected to be
compensated by improvement in core income and better net investment gains.
5
20 October 2016

Yes Bank
Further, strong PCR of ~65% and floating provisions of 0.3% on loans provide
cushion on our earnings estimates.
Return ratios are expected to remain healthy with RoA at 1.8% and RoE at 21%+.
The stock trades at 2.8x FY18 BV (pre-capital raise) and 13.1x FY18 EPS.
Reiterate Buy with a target price of INR1,500 (3x
September 2018
BV) – based
on residual income model (Average growth of ~16% over FY16-36E, Terminal
growth of 5%, 13.7% cost of equity – risk free rate of 7.25%, beta of 1.3, and 5%
market risk premium). Our numbers don’t factor in impact of capital raise on the
BV.
Expect strong earnings
CAGR of 25% over FY16-19;
ROEs expected to be 20%+
Exhibit 3:
Estimates largely unchanged
INR B
Net Interest Income
Other Income
Total Income
Operating Expenses
Operating Profits
Provisions
PBT
Tax
PAT
Margins (%)
Credit Cost (%)
RoA (%)
RoE (%)
FY17
57.5
37.7
95.2
38.0
57.2
7.9
49.3
16.0
33.3
3.44
0.70
1.80
22.01
Old Est.
FY18
73.5
47.5
121.1
47.5
73.6
10.4
63.1
20.5
42.6
3.54
0.70
1.86
23.50
FY19
92.8
58.2
151.0
59.4
91.6
15.6
76.0
24.7
51.3
3.57
0.75
1.80
23.47
FY17
59.1
37.0
96.1
39.6
56.5
7.1
49.4
16.8
32.6
3.54
0.65
1.77
21.61
New Est.
FY18
75.6
45.5
121.1
49.5
71.6
9.2
62.4
20.3
42.1
3.64
0.65
1.84
23.33
FY19
95.5
55.8
151.2
61.8
89.4
13.6
75.8
24.6
51.1
3.67
0.70
1.79
23.49
% Change
FY17 FY18 FY19
2.8
2.9
2.9
-1.9
-4.3
-4.2
0.9
0.0
0.2
4.1
4.1
4.1
-1.2
-2.6
-2.4
-10.2 -11.7 -12.3
0.3
-1.1
-0.4
4.9
-1.1
-0.4
-2.0
-1.1
-0.4
Source: MOSL, Company
Exhibit 4:
One year forward P/BV
6.0
4.0
2.3
2.0
0.0
2.2
0.5
PB (x)
Median(x)
Peak(x)
Min(x)
Avg(x)
4.8
2.9
Exhibit 5:
One year forward P/E
30.0
20.0
10.0
0.0
PE (x)
Median(x)
Peak(x)
Min(x)
Avg(x)
26.6
12.4
10.9
3.5
13.9
Source: MOSL, Company
Source: MOSL, Company
20 October 2016
6

Yes Bank
Exhibit 6:
DuPont: Return ratios to improve driven by strong core operating performance (%)
Y/E March
Net Interest Income
Core Fee Income
Fee to core Income (%)
Core Income
Operating Expenses
Cost to Core Income (%)
Employee cost
Others
Core operating Profits
Trading and others
Operating Profits
Provisions
NPA
Others
PBT
Tax
Tax Rate (%)
RoA
Leverage (x)
RoE
FY10
2.66
1.61
35.0
4.27
1.69
39.5
0.87
0.82
2.58
0.33
2.91
0.46
0.30
0.17
2.45
0.84
34.2
1.61
12.6
20.3
FY11
2.61
1.40
35.8
4.02
1.43
35.5
0.76
0.67
2.59
-0.10
2.50
0.21
0.08
0.13
2.29
0.77
33.4
1.52
13.9
21.1
FY12
2.44
1.24
33.1
3.67
1.41
38.3
0.72
0.69
2.27
0.06
2.32
0.14
0.02
0.12
2.19
0.71
32.6
1.47
15.7
23.1
FY13
2.57
1.28
31.7
3.84
1.55
40.2
0.76
0.79
2.30
0.18
2.48
0.25
0.17
0.08
2.23
0.72
32.5
1.51
16.5
24.8
FY14
2.61
1.49
35.0
4.11
1.68
41.0
0.75
0.93
2.42
0.16
2.58
0.35
0.13
0.22
2.24
0.68
30.5
1.55
16.1
25.0
FY15
2.85
1.55
34.4
4.40
1.86
42.4
0.80
1.06
2.53
0.12
2.65
0.28
0.11
0.17
2.37
0.74
31.1
1.64
13.0
21.3
FY16
3.03
1.63
33.7
4.66
1.97
42.4
0.86
1.11
2.68
0.17
2.85
0.36
0.33
0.03
2.50
0.81
32.6
1.68
11.8
19.9
FY17E
3.20
1.75
33.7
4.96
2.14
43.3
0.98
1.16
2.81
0.25
3.06
0.39
0.39
-0.01
2.68
0.91
34.0
1.77
12.2
21.6
FY18E
FY19E
3.31
3.35
1.79
1.79
33.7
33.8
5.09
5.14
2.16
2.17
42.5
42.2
0.99
1.00
1.17
1.17
2.93
2.98
0.20
0.16
3.13
3.14
0.40
0.48
0.41
0.45
0.00
0.03
2.73
2.66
0.89
0.86
32.5
32.5
1.84
1.79
12.7
13.1
23.3
23.5
Source: MOSL, Company
Exhibit 7:
DuPont: Healthy operating profitability led by strong operating income performance
Net interest income
Non-interest income
Operating Income
Cost/income (%)
Operating cost
- Employee
- Others
Operating Profit
Provisions
PBT
Tax
ROAA (%)
Leverage (x)
ROAE (%)
4QFY14
2.74
1.69
4.43
41.6
1.84
0.78
1.07
2.59
0.27
2.31
0.68
1.64
14.9
24.3
1QFY15
2.73
1.51
4.24
45.4
1.93
0.82
1.10
2.31
0.09
2.23
0.65
1.58
12.4
19.6
2QFY15
3.03
1.79
4.82
40.0
1.93
0.85
1.08
2.89
0.42
2.47
0.76
1.71
10.5
18.0
3QFY15
3.04
1.79
4.83
40.3
1.95
0.85
1.10
2.88
0.23
2.65
0.84
1.80
10.6
19.2
4QFY15
3.01
1.82
4.83
40.2
1.94
0.81
1.14
2.89
0.39
2.50
0.80
1.70
11.2
19.0
1QFY16
3.08
1.58
4.67
43.4
2.03
0.84
1.19
2.64
0.28
2.36
0.75
1.60
11.5
18.4
2QFY16
3.12
1.74
4.87
41.0
1.99
0.88
1.11
2.87
0.29
2.58
0.86
1.72
11.3
19.4
3QFY16 4QFY16 2QFY17
3.16
3.17
3.08
2.04
2.05
2.10
5.20
5.22
5.18
39.6
40.1
41.1
2.06
2.09
2.13
0.94
0.90
0.95
1.12
1.19
1.17
3.14
3.13
3.05
0.40
0.48
0.48
2.74
2.66
2.57
0.89
0.86
0.86
1.85
1.79
1.71
11.1
11.4
12.1
20.5
20.5
20.7
Source: MOSL, Company
20 October 2016
7

Yes Bank
Story in charts
Exhibit 8:
Strong traction in loans (+4%
QoQ, +38% YoY)
Loans (INR b)
YoY Growth (%)
Exhibit 9: Credit substitutes book grew 22% YoY
Customer Assets (INR b)
YoY Growth (%)
24
23 22 24 24
32 36 35 29 27 30 33 38
23 30
14 15 18
28
20
32 33
27
31
14
1516 17
14
26 24
23 25
19
23
30
36
Source: Company, MOSL
Source: Company, MOSL
Exhibit 10: Strong deposits growth…
Deposit (INR b)
36 30 29
YoY Growth (%)
Exhibit 11: CASA ratio +480bp YoY – crosses 30%; SA growth
remains strong (+54% YoY)
SA (%)
CA (%)
15 19 20
21
25 24 23 23 29 29
17 19 21 23
11
Source: Company, MOSL
Source: Company, MOSL
Exhibit 12: Credit substitutes proportion remains steady (%)
22
21 22 22
22 21
20
Exhibit 13:
Reported NIM
stable QoQ (%)
3.3 3.3
3.4 3.4 3.4 3.4
17
14
3.2 3.2 3.2
15
13
12
3.0 3.0 3.0
9
9
9
2.9
2.8
2.9 2.9
3.0 3.0
10 10
Source: Company, MOSL
Source: Company, MOSL
20 October 2016
8

Yes Bank
Story in charts
Exhibit 14:
Both yields and COF trending lower
Yield on loans
Cost of funds
Exhibit 15: Cost to income well under control (-50bps QoQ)
Source: Company, MOSL
Source: Company, MOSL
Exhibit 16:
Traction
in retail fees continues (INR m)
1,816 1,774
2,096
Exhibit 17:
GNPA increases 9% QoQ on a low base
PCR (%)
88 85
78
85
GNPA (%)
NNPA (%)
0.8
0.8 0.8
1,533
915
1,153
1,515
1,341 1,452
78 76 77
72 71 0.6 0.7
68 66
64 65
62
0.5
0.4 0.4
0.4
0.3 0.3 0.4
0.3 0.3 0.3
0.3
0.2
0.2 0.2
0.1 0.1 0.1 0.1
0.0 0.0 0.1 0.1 0.1
Source: Company, MOSL
Source: Company, MOSL
Exhibit 18:
ORSL tick lower QoQ (bps)
OSRL (bps)
Exhibit 19:
Added
50 branches during the quarter (nos.)
300
250
200
150
100
50
0
Rolling four quarter branch addition
Source: Company, MOSL
Source: Company, MOSL
20 October 2016
9

Yes Bank
Exhibit 20:
Quarterly Snapshot (INR b)
FY15
1Q
Profit and Loss (INR m)
Interest Income
Loans
Investment
Others
Interest Expenses
Net Interest Income
Other Income
Total Income
Operating Expenses
Employee
Others
Operating Profits
Provisions
PBT
Taxes
PAT
Asset Quality
GNPA
NNPA
GNPA (%)
NNPA (%)
PCR (Calculated, %)
Margins (%) - Reported
Yield on loans
Cost of funds
Margins
Balance Sheet (INR B)
Loans
Investments
Deposits
CASA Deposits
Borrowings
Total Assets
Risk Weighted Assets
Loan Mix
C&IB
Commercial Banking
Branch Banking
MSME
Consumer banking
Other Details
Branches
Employees
26,796
18,459
7,872
466
19,343
7,453
4,136
11,589
5,267
2,247
3,020
6,322
237
6,085
1,769
4,315
1,980
428
0.3
0.1
78
12.5
8.5
3.0
590
381
761
170
171
1,097
846
68.7
14.5
16.8
2Q
28,324
19,686
8,215
422
19,760
8,564
5,056
13,620
5,449
2,390
3,059
8,171
1,195
6,976
2,151
4,825
2,224
539
0.4
0.1
76
12.2
8.3
3.2
620
415
801
180
196
1,162
902
71.4
28.6
14.7
9.1
4.8
581
9,612
3Q
29,717
20,710
8,887
119
20,626
9,090
5,368
14,458
5,831
2,541
3,290
8,627
699
7,929
2,526
5,403
2,787
645
0.4
0.1
77
12.2
8.1
3.2
666
428
824
186
235
1,233
970
68.7
31.3
14.3
9.0
8.0
600
9,887
4Q
30,884
21,306
8,994
584
21,113
9,771
5,904
15,675
6,300
2,619
3,682
9,375
1,264
8,111
2,602
5,510
3,134
877
0.4
0.1
72
12.0
7.8
3.2
755
432
912
211
262
1,362
1,035
64.7
35.3
1Q
32,519
23,285
8,555
679
21,920
10,598
5,452
16,050
6,967
2,885
4,082
9,083
980
8,103
2,591
5,512
3,683
1,067
0.5
0.1
71
11.9
7.6
3.3
797
422
953
223
253
1,390
1,127
68.0
32.0
14.1
10.6
7.3
662
11,543
2Q
33,772
24,148
8,560
1,064
22,688
11,085
6,181
17,266
7,074
3,128
3,947
10,191
1,039
9,152
3,048
6,104
4,914
1,586
0.6
0.2
68
11.6
7.3
3.3
800
439
993
253
238
1,448
1,171
68.2
31.8
13.3
11.3
7.2
700
12,700
FY16
3Q
33,760
24,209
8,852
698
22,191
11,569
7,461
19,030
7,534
3,426
4,108
11,496
1,479
10,016
3,260
6,757
5,586
1,872
0.7
0.2
66
11.5
7.1
3.4
844
456
1,014
270
267
1,478
1,211
67.2
32.8
12.7
10.6
9.5
750
13,477
4Q
35,283
25,472
9,114
697
22,869
12,414
8,028
20,443
8,188
3,528
4,659
12,255
1,865
10,390
3,369
7,021
7,490
2,845
0.8
0.3
62
11.2
7.0
3.4
982
488
1,117
313
317
1,653
1,329
65.1
34.9
11.1
13.0
10.8
860
15,000
1Q
38,623
28,401
9,590
633
25,457
13,166
9,005
22,171
9,103
4,074
5,030
13,068
2,066
11,001
3,683
7,318
8,446
3,024
0.8
0.3
64
11.1
7.0
3.4
1,059
461
1,226
363
319
1,772
1,443
67.5
32.5
11.0
12.1
9.4
900
16,421
FY17
2Q
40,944
30,658
9,314
972
26,482
14,462
8,879
23,340
9,481
4,334
5,147
13,860
1,617
12,243
4,228
8,015
9,167
3,230
0.8
0.3
65
10.9
6.8
3.4
1,102
496
1,280
388
346
1,873
1,546
67.9
32.1
10.7
12.8
8.6
Variation (%)
QoQ
YoY
6
8
-3
54
4
10
-1
5
4
6
2
6
-22
11
15
10
9
7
4
0
57
-20
-20
0
4
8
4
7
8
6
7
40
-40
-30
70
-80
21
27
9
-9
17
30
44
35
34
39
30
36
56
34
39
31
87
104
22
9
-295
-70
-50
10
38
13
29
53
46
29
32
-30
30
-260
150
140
572
9,051
630
10,810
950
18,531
Source: MOSL, Company
20 October 2016
10

Yes Bank
Exhibit 21:
Financials: Valuation Metrics
Rating
66
ICICIBC*
Buy
HDFCB
Buy
AXSB
Buy
KMB*
Buy
YES
Buy
IIB
Buy
IDFC Bk
UR
FB
Buy
DCBB
Neutral
JKBK
Neutral
SIB
Buy
Private Aggregate
SBIN (cons)*
Buy
PNB
Neutral
BOI
Neutral
BOB
Buy
CBK
Neutral
UNBK
Buy
OBC
Neutral
INBK
Buy
ANDB
Buy
Public Aggregate
Banks Aggregate
HDFC*
Buy
LICHF
Buy
IHFL
Buy
GRHF
Neutral
REPCO
Buy
DEWH
Buy
Housing Finance
RECL
Neutral
POWF
Neutral
Infra Finance
SHTF
Buy
MMFS
Buy
BAF
Buy
MUTH
Buy
Asset Finance
NBFC Aggregate
Financials
CMP
Mcap
EPS (INR)
FY17
17.3
58.4
31.8
26.8
79.0
48.4
3.4
4.3
7.2
-1.8
3.0
14.7
10.8
-10.8
14.1
26.8
22.4
16.7
25.3
1.5
FY18
20.0
70.2
37.4
34.0
101.2
60.9
4.2
5.2
8.7
5.6
3.6
24.3
12.8
21.6
20.0
36.8
39.1
24.2
31.4
6.4
P/E (x)
FY17
12.6
21.5
16.9
28.8
16.6
25.0
22.7
16.9
17.8
-38.6
8.1
20.9
17.6
13.5
-10.6
11.2
12.0
6.6
7.9
8.9
37.2
16.0
19.3
27.2
15.4
12.9
42.3
25.6
10.5
22.2
4.6
5.2
4.9
16.2
24.8
32.4
12.5
13.9
14.1
17.6
FY18
10.0
17.9
14.4
22.7
12.9
19.8
18.4
14.1
14.7
12.3
6.6
17.4
10.7
11.3
5.3
7.9
8.7
3.8
5.5
7.2
8.8
10.4
14.7
21.5
12.3
10.4
33.5
19.6
8.5
18.7
4.1
4.9
4.5
12.2
20.0
25.4
10.4
11.3
12.1
13.9
BV (INR)
FY17
145
332
243
208
390
333
43
50
69
130
30
234
189
239
157
498
314
410
300
109
P/BV (x)
FY18
1.25
3.25
1.97
3.21
2.78
3.13
1.68
1.35
1.65
0.51
0.73
2.43
1.14
0.73
0.45
0.91
0.61
0.43
0.31
0.70
0.50
0.76
1.53
3.31
2.41
2.78
9.73
3.62
1.43
3.93
0.70
0.74
0.73
1.97
2.75
5.49
1.94
2.05
2.24
1.67
RoA (%)
FY17
1.13
1.90
1.32
1.61
1.80
1.83
1.24
0.75
0.95
-0.10
0.59
0.47
0.31
-0.16
0.47
0.25
0.37
0.23
0.57
0.08
FY18
1.18
1.89
1.31
1.82
1.86
1.85
1.13
0.75
0.93
0.28
0.62
0.54
0.34
0.29
0.60
0.31
0.58
0.30
0.64
0.31
RoE (%)
FY17
10.5
18.9
13.8
14.2
22.0
15.5
8.2
8.9
11.0
-1.4
10.3
7.9
5.8
-4.6
9.3
5.5
7.4
4.2
8.7
1.4
FY18
11.2
19.6
14.4
15.4
23.5
17.0
9.4
9.9
11.9
4.2
11.7
9.5
6.6
8.7
12.1
7.2
11.8
5.8
10.0
5.8
(INR) (USD b)
278
24.5
1,255
48.1
539
19.5
772
21.4
1,309
8.4
1,207
10.9
77
4.0
73
1.9
128
0.6
69
0.5
24
0.5
140.1
260
30.6
145
4.3
114
1.6
158
5.5
322
2.6
148
1.5
133
0.7
225
1.6
57
1.8
50.3
190.4
1,359
32.5
609
4.7
874
5.6
338
1.9
777
0.7
330
1.5
46.9
136
4.1
124
5.0
9.0
1,140
3.9
362
3.1
1,121
1.8
349
2.1
12.8
68.7
259.2
FY18 FY17
160 1.45
386 3.78
274 2.22
240 3.72
471 3.35
385 3.63
46
1.81
54
1.45
77
1.86
136 0.53
33
0.80
2.73
253 1.25
200 0.77
255 0.48
173 1.00
527 0.65
348 0.47
428 0.32
324 0.75
114 0.52
0.80
1.67
217 4.20
253 2.86
315 3.12
35 11.99
215 4.33
231 1.63
4.45
194 0.81
167 0.83
0.83
579 2.26
131 3.06
204 6.74
180 2.20
2.31
2.54
1.84
34.5
39.5
67.6
8.0
30.4
31.4
29.4
24.0
70.5
14.6
34.6
28.0
37.8
49.6
84.0
10.1
39.7
38.8
33.4
25.5
93.8
18.1
44.2
33.6
194
213
280
28
180
202
168
149
505
118
166
159
1.84
1.49
3.68
2.25
2.15
1.27
2.63
2.37
2.43
2.02
3.48
3.66
1.82
1.55
3.78
2.26
2.20
1.31
2.54
2.12
2.75
2.19
3.38
3.57
19.4
20.1
25.3
31.3
18.3
17.0
18.8
16.8
14.8
12.9
22.8
18.7
19.0
21.3
28.3
32.1
20.1
17.9
18.5
16.2
17.2
14.5
23.9
19.9
UR=Under Review*Multiples adj. for value of key ventures/Invest.; For ICICI Bank and HDFC Ltd BV is adjusted for investments in subsidiaries
20 October 2016
11

Yes Bank
Financials and valuations
Income Statement
Y/E March
Interest Income
Interest Expense
Net Interest Income
Change (%)
Non Interest Income
Net Income
Change (%)
Operating Expenses
Pre Provision Profits
Change (%)
Provisions (excl tax)
PBT
Tax
Tax Rate (%)
PAT
Change (%)
Equity Dividend (Incl tax)
Core PPP*
Change (%)
*Core PPP is (NII+Fee income-Opex)
2013
82,940
60,752
22,188
37.3
12,574
34,762
40.6
13,345
21,417
39.1
2,160
19,257
6,251
32.5
13,007
33.1
2,510
19,860
32.2
2014
99,814
72,651
27,163
22.4
17,216
44,378
27.7
17,499
26,880
25.5
3,617
23,263
7,085
30.5
16,178
24.4
3,397
25,218
27.0
2015
115,720
80,842
34,878
28.4
20,465
55,343
24.7
22,847
32,496
20.9
3,395
29,101
9,047
31.1
20,054
24.0
4,528
31,075
23.2
2016
135,334
89,667
45,667
30.9
27,121
72,789
31.5
29,764
43,025
32.4
5,363
37,662
12,268
32.6
25,394
26.6
5,062
40,419
30.1
2017E
166,611
107,495
59,116
29.4
36,977
96,093
32.0
39,570
56,523
31.4
7,127
49,396
16,794
34.0
32,601
28.4
6,647
51,916
28.4
2018E
199,882
124,262
75,621
27.9
45,477
121,098
26.0
49,462
71,635
26.7
9,223
62,412
20,284
32.5
42,128
29.2
8,589
67,029
29.1
(INR Million)
2019E
244,768
149,302
95,466
26.2
55,764
151,230
24.9
61,828
89,402
24.8
13,643
75,760
24,622
32.5
51,138
21.4
10,426
84,796
26.5
Balance Sheet
Y/E March
Share Capital
Reserves & Surplus
Net Worth
Deposits
Change (%)
of which CASA Dep
Change (%)
Borrowings
Other Liabilities & Prov.
Total Liabilities
Current Assets
Investments
Change (%)
Loans
Change (%)
Fixed Assets
Other Assets
Total Assets
2013
3,586
54,490
58,077
669,556
36.2
126,875
71.6
209,221
54,187
991,041
40,658
429,760
54.8
469,996
23.7
2,295
48,332
991,041
943
70
0.20
0.01
0.64
0.34
92.6
2014
3,606
67,611
71,217
741,920
10.8
163,447
28.8
213,143
63,877
1,090,158
58,917
409,503
-4.7
556,330
18.4
2,935
62,473
1,090,158
1,749
261
0.31
0.05
0.85
0.26
85.1
2015
4,177
112,622
116,800
911,758
22.9
210,790
29.0
262,204
70,942
1,361,704
75,572
432,285
5.6
755,498
35.8
3,190
95,160
1,361,704
3,134
877
0.41
0.12
0.70
0.20
72.0
2016
4,205
133,661
137,866
1,117,195
22.5
313,428
48.7
316,590
80,983
1,652,634
82,184
488,385
13.0
982,099
30.0
4,707
95,259
1,652,634
7,490
2,845
0.76
0.29
1.21
0.57
62.0
2017E
4,211
159,615
163,826
1,418,838
27.0
465,969
48.7
358,661
96,885
2,038,210
104,357
561,642
15.0
1,257,087
28.0
5,576
109,548
2,038,210
10,417
3,495
0.82
0.28
1.25
0.65
66.5
2018E
4,211
193,155
197,366
1,816,113
28.0
640,455
37.4
407,089
116,054
2,536,621
131,800
662,738
18.0
1,609,071
28.0
7,032
125,980
2,536,621
12,382
4,145
0.77
0.26
1.25
0.65
66.5
(INR Million)
2019E
4,211
233,867
238,078
2,324,624
28.0
870,758
36.0
462,014
139,171
3,163,887
168,881
782,031
18.0
2,059,611
28.0
8,488
144,877
3,163,887
Asset Quality
GNPA (INR m)
NNPA (INR m)
GNPA Ratio
NNPA Ratio
Slippage Ratio
Credit Cost
PCR (Excl Tech. write off)
E: MOSL Estimates
(%)
15,531
5,453
0.75
0.26
1.40
0.70
64.9
20 October 2016
12

Yes Bank
Financials and valuations
Ratios
Y/E March
Spreads Analysis (%)
Avg. Yield-Earning Assets
Avg. Yield on loans
Avg. Yield on Investments
Avg. Cost-Int. Bear. Liab.
Avg. Cost of Deposits
Interest Spread
Net Interest Margin
Profitability Ratios (%)
RoE
RoA
Int. Expense/Int.Income
Fee Income/Net Income
Non Int. Inc./Net Income
Efficiency Ratios (%)
Cost/Income*
Empl. Cost/Op. Exps.
Busi. per Empl. (INR m)
NP per Empl. (INR lac)
* ex treasury
Asset-Liability Profile (%)
Loans/Deposit Ratio
CASA Ratio
Investment/Deposit Ratio
G-Sec/Investment Ratio
CAR
Tier 1
2013
10.5
12.7
8.1
8.0
7.9
2.5
2.8
2014
10.6
12.7
8.1
7.9
8.0
2.7
2.9
2015
10.6
12.2
8.0
7.6
7.9
3.0
3.2
2016
10.0
11.2
7.6
6.9
7.1
3.1
3.4
2017E
10.0
11.1
7.3
6.7
6.8
3.3
3.5
2018E
9.6
10.6
7.1
6.2
6.2
3.4
3.6
2019E
9.4
10.4
6.8
6.0
5.9
3.5
3.7
24.8
1.5
73.2
31.7
36.2
25.0
1.6
72.8
38.8
38.8
21.3
1.6
69.9
37.0
37.0
19.9
1.7
66.3
37.3
37.3
21.6
1.8
64.5
38.5
38.5
23.3
1.8
62.2
37.6
37.6
23.5
1.8
61.0
36.9
36.9
40.2
49.1
143.1
18.5
41.0
44.8
138.5
18.4
42.4
42.9
137.2
18.6
42.4
43.6
125.6
16.9
43.3
45.9
124.0
16.9
42.5
45.9
125.5
17.3
42.2
45.9
129.4
17.0
70.2
18.9
64.2
54.8
18.3
9.5
75.0
22.0
55.2
54.8
14.4
9.8
82.9
23.1
47.4
69.4
15.6
11.5
87.9
28.1
43.7
72.0
16.5
10.7
88.6
32.8
39.6
69.6
14.8
10.0
88.6
35.3
36.5
73.8
13.8
9.7
88.6
37.5
33.6
78.4
12.8
9.3
Valuation
Book Value (INR)
Change (%)
Price-BV (x)
Adjusted BV (INR)
Price-ABV (x)
EPS (INR)
Change (%)
Price-Earnings (x)
Dividend Per Share (INR)
Dividend Yield (%)
E: MOSL Estimates
161.9
22.2
8.1
161.8
8.1
36.3
31.0
36.1
6.0
0.5
197.5
21.9
6.6
197.0
6.6
44.9
23.7
29.2
8.0
0.6
279.6
41.6
4.7
278.2
4.7
48.0
7.0
27.3
9.0
0.7
327.8
17.3
4.0
323.4
4.0
60.4
25.8
21.7
10.0
0.8
389.1
18.7
3.4
383.7
3.4
77.4
28.2
16.9
13.5
1.0
468.7
20.5
2.8
462.3
2.8
100.0
29.2
13.1
17.5
1.3
565.4
20.6
2.3
557.0
2.4
121.4
21.4
10.8
21.3
1.6
20 October 2016
13

Yes Bank
Corporate profile
Company description
Exhibit 22: Sensex rebased
Yes Bank, a private bank incorporated in 2003, is
promoted and led by Mr. Rana Kapoor, who is
currently the MD & CEO of the bank. Yes Bank has
steadily built a full-service commercial bank with
Corporate, Retail and SME Banking platforms, with
a comprehensive product suite. It was the first
bank to offer differentiated rates on savings
account following RBI's deregulation of savings
account rates in October 2011. The number of
branches and ATMs stood at 900 and 1,680
respectively.
Exhibit 23: Shareholding pattern (%)
Jun-16
Promoter
DII
FII
21.9
24.0
42.2
Mar-16
21.9
24.3
41.3
Jun-15
22.0
21.3
44.4
12.3
Exhibit 24: Top holders
Holder Name
Life Insurance Corporation Of India Along With Its
Franklin India Monthly Income Plan Along With Its
Franklin Templeton Investment Funds
Birla Sun Life Trustee Company Private Limited Along
Platinum Asia Fund
%
Holding
8.9
2.5
2.0
1.9
1.7
Others
12.0
12.6
Note: FII Includes depository receipts
Exhibit 25:
Top management
Name
Radha Singh
Rana Kapoor
Shivanand R Shettigar
Designation
Chairperson(Part-time)
Managing Director & CEO
Company Secretary
Exhibit 26: Directors
Name
Ajai Kumar*
Ashok Chawla
Brahm Dutt*
Diwan Arun Nanda*
M R Srinivasan
Name
Mukesh Sabharwal*
Radha Singh
Rana Kapoor
Saurabh Srivastava*
Vasant V Gujarathi*
*Independent
Exhibit 27: Auditors
Name
Mehta & Mehta
BSR & Co LLP
S R Batliboi & Co LLP
Type
Secretarial Audit
Statutory
Statutory
Exhibit 28: MOSL forecast v/s consensus
EPS
(INR)
FY17
FY18
MOSL
forecast
77.4
100.0
Consensus
forecast
72.5
90.5
Variation
(%)
6.7
10.5
20 October 2016
14

PRODUCT GALLERY
Our recent reports on Yes Bank
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YES BANK
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