18 May 2017
Annual Report Update | Sector: Financials
Yes Bank
Buy
BSE SENSEX
30,435
S&P CNX
9,429
CMP: INR1,401
TP: INR2,110 (+51%)
FY17 annual report analysis: A much stronger liability franchise
Net stress loans at just ~2.2%, despite accounting for divergence
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
12M Avg Val (INR M)
Free float (%)
YES IN
456.5
1653 / 963
-17/2/26
639.5
9.4
3862
79.8
Financials Snapshot (INR b)
Y/E March
2017 2018E 2019E
NII
58.0
74.8
95.3
OP
58.4
69.7
88.4
NP
33.3
41.3
52.0
NIM (%)
3.4
3.5
3.6
EPS (INR)
73.0
90.5 114.0
EPS Gr. (%)
20.8
24.1
25.9
BV/Sh. (INR)
468.7 540.7 631.5
ABV/Sh. (INR)
453.4 533.7 622.1
RoE (%)
18.9
17.9
19.4
RoA (%)
1.8
1.7
1.8
P/E(X)
19.2
15.5
12.3
P/BV (X)
3.0
2.6
2.2
Shareholding pattern (%)
Mar-17 Dec-16 Mar-16
As On
Promoter
20.2
21.8
21.9
DII
23.3
23.8
24.3
FII
46.7
42.0
41.3
Others
9.9
12.4
12.6
FII Includes depository receipts
Stock Performance (1-year)
Yes Bank
Sensex - Rebased
1,750
1,550
1,350
1,150
950
YES’ annual report analysis (AR) suggests strong performance across parameters in a
period marred by significant economic challenges. Liability franchise has
strengthened significantly, with sustained improvement in CASA ratio to 36.3% (up
820bp), improving deposit concentration ratios, and more favorable ALM profile. This
has also benefitted NIM and increased fee income streams.
The bank has increased its loan market share to 1.7% of the system, while
maintaining strong return ratios – RoA of 1.8% and RoE of 20%. YES is consuming
capital at a fast pace – steep increase in RWA; recent capital raising (INR49b)
provides cushion for future growth.
YES reported ~76bp GNPA for FY16, whereas the RBI estimated 5% GNPA. The
divergence was owing to the fact that while rule-based accounting (90dpd) allows
banks to classify some accounts as standard, RBI may ask banks to classify accounts
with inherent weaknesses as NPAs. From FY17 onwards, reporting of the divergence
is a mandatory disclosure in the AR. Bank has fully accounted for divergences in FY17.
YES remains our top pick among mid-sized private banks, with healthy capitalization
(CET1 of 11.4%), strong capital allocation (best in class RoE), and market-leading
growth rates (expect at least 2x industry growth). We reiterate Buy, with a target
price of INR2,110/share.
Divergences fully accounted for; no recognition impact in ensuing quarters
Of the total divergence of ~INR41.8b reported in the AR, INR10.4b is
outstanding as NPA, with the balance amount repaid, exited, or recovered in
some manner. The bank expects recoveries in one large account amounting to
INR9.1b (part of the o/s INR10.4b NPA).
Large part of the recoveries and upgrades (INR12.2b), and ARC sales (INR9.6b)
was driven by divergence-related accounts. Our analysis suggests that over
INR12b have been repaid in the normal course of business during the year
(INR41.8b divergence = INR10.4b still NPA + INR10b recoveries/upgrades +
INR9b sold to ARC + INR12.4b repaid).
We expect other banks, particularly private corporate lenders, to report
significant divergence in their AR, as well – ICICIBC has reported INR53.8b
(1.2% of loans) and AXSB has reported INR94.8b (2.5% of loans) in their results
conference calls. Even after taking ‘divergence accounts’ into consideration,
YES’ o/s net stress loans stand at 2.2% v/s 8% for ICICIBC and 5% for AXSB.
YES has invested heavily in branches (23% 5-year CAGR), employees (3.5x
increase since FY12), and rollout of complete product suite. Improvement in
productivity is evident, with average SA balance per branch increasing to
INR286m in FY17 v/s INR221m in FY16 and INR58m in FY12.
Resultantly, CASA ratio improved sharply in FY17 (up 820bp) to 36.3% (15% in
FY12), led by robust 61% growth in SA deposits. We believe YES’ customer
strategy of targeting cash rich regions is paying off, given that it has maintained
incremental SA market share of 1.5%+ over the last three years.
Stark improvement in balance sheet granularity
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.
Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com); +91 22 6129 1526
Subham Banka
(Subham.Banka@MotilalOswal.com); +91 022 6129 1567

Yes Bank
Concentration ratios of top-20 customers have improved – top-20 deposits at
11.1% (v/s 11.7% in FY16) and top-20 loans at 12.4% (v/s 13.8% in FY16).
Liability profile is improving sharply, with the less than one-year maturity
deposits declining to 56% of total deposits v/s 64% a year ago and ~85% in FY12.
Capital consumption high; sufficient Tier-1 post recent capital raising
Strong loan growth (~35%) has come at high capital consumption – risk-
weighted assets grew 40% and stood at 87% of total assets v/s 80% in FY16 and
71% in FY12.
The recent capital raising of INR49b (~30% of pre-issue net worth) added
~300bp to Tier-1 ratio. YES also raised INR30b in AT1 bonds during the year.
Hence, Tier-1 capital improved to 13.3% v/s 10.3% a year ago, despite 40%
growth in RWA.
The bank has regularly maintained ~2.1% return on risk-weighted assets, which
despite the high risk weights, continues to be on the higher side v/s peers.
Strong core profitability; return ratios remain robust
Net income growth has been robust at 37%, led by strong loan growth (+35%
YoY), stable margin profile (3.4% NIM), and increasing fee income contribution
(1.5% of assets).
Core PPoP as a percentage of assets has increased steadily to 2.7% v/s 2.3% in
FY12; the bank has contained credit costs at less than 0.3% of assets, thereby
ensuring wide gap between operating profitability and NPL provisions.
RoA improved to 1.8% v/s 1.7% in FY16 and 1.5% in FY12 – at par with the
leading banks in the system. YES has been able to maintain industry-leading RoE
of 20%+, despite frequent capital raising over the last five years.
Other takeaways from annual report
Share of overseas loans has increased from 1.5% in FY16 to 4.6% in FY17 led by
strong business growth in GIFT City – YES has already crossed the USD1b
transactions mark here. Bulk of overseas loans is syndicated.
Share of non-interest income as a percentage of assets increased to 2.2% v/s
1.8% in FY16, even as the proportion of off-balance sheet items to on-balance
sheet assets decreased to 1.8x v/s 2x in FY16. Fees grew 43% to INR35b, with
share of retail fees increasing to ~30% v/s 25% a year ago. Trading gains as a
percentage of PBT increased to 14% v/s 7% in FY16.
PCR declined to ~47% v/s 62% in FY16, led by divergence-related NPL formation
during the quarter. With expected normalization in slippages in FY18 and
recovery in the large account (INR9.1b), PCR may increase.
Share of secured loans increased to ~74% of loans v/s ~68% in FY16 and just
~45% in FY12.
Outstanding real estate advances (largely residential real estate) stood at
INR109.3b (8% of loans) v/s 10% a year ago.
YES Securities reported PAT of INR98m v/s a loss of INR98m a year ago. Total
revenue grew 1.6x to INR638m.
The bank granted 0.4% of equity as ESOPs during the year; 0.7% of equity is
diluted on account of exercise of ESOPs. Outstanding ESOPs have exhibited a
declining trend and stand at 3.7% v/s 4.6% in FY16 and 5.5% in FY13.
2
18 May 2017

Yes Bank
Valuation and view
We see divergence-related issues and surrounding noise as transitory. Despite
the significant recognition during the year, YES has best in class net stress loans
of ~2.2% v/s peer corporate lenders like ICICIBC (11.8%) and AXSB (4.7%).
With continued investment in franchise, people and processes, YES is well
positioned to leverage the opportunity that the Indian economy presents. It has
strong capitalization (CET1 of ~11.4%); branch network has increased to 1,000
v/s 214 in FY11, and employee strength is up at 20,000+ v/s 3,929 in FY11.
Comfortable liquidity, low inflation and bulk deposit rates are significant
positives from the perspective of NIM (higher short-term liabilities) and bond
gains (~9% share of corporate bonds in customer assets). Further, the bank has
room to reduce savings deposits rate, leading to margin stability. Stable/
improving NIM and traction in fees will keep core PPP CAGR strong at ~27% over
FY17-20, despite strong investments in building liability franchise.
With an incremental market share of 3.5%+, aggressive roll-out of retail/SME
products and strong corporate relationships, YES is expected to register loan
CAGR (FY17-20) of 28% – at least 2x system loan growth.
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; On the
balance sheet front, the bank’s initial focus will be on growing the liability side
first, and as customer relationships age, focus would be on cross-selling retail
assets. The bank has been expanding its branch network at an increasing pace.
YES’ total stress loans (NNPA+OSLR+SDR+5:25+S4A) remain one of the lowest in
the industry at ~2.2%. Robust loan growth, NIM expansion (~30bp led by capital
raising, higher CASA and share of retail loans), and rising fee income
contribution are expected to drive a ~25% PAT CAGR through FY20. This will see
RoA remaining healthy at 1.8% and RoE being maintained at ~20%.
The stock trades at 2.4x FY19E BV and 13.1x FY19E EPS. We
reiterate Buy
with a
target price of INR2,110 (3.3x FY19E BV), based on residual income model
(average growth of ~18% over FY16-36, terminal growth of 5%, 14.2% cost of
equity – risk-free rate of 7%, beta of 1.4, and 5% market risk premium).
Exhibit 1: We revisit estimates post the annual report analysis
INR B
NII
Other Income
Total Income
Opex
Operating Profits
Provisions
PBT
Tax
PAT
Old Est.
FY18
FY19
76.6
97.6
46.4
57.5
123.0
155.1
52.1
65.1
70.9
89.9
8.5
11.9
62.4
78.0
20.3
25.0
42.1
53.0
New Est.
FY18
FY19
74.8
95.3
46.4
57.5
121.2
152.8
51.5
64.3
69.7
88.4
8.5
11.9
61.2
76.5
19.9
24.5
41.3
52.0
% Change
FY18
FY19
-2.4
-2.4
0.0
0.0
-1.5
-1.5
-1.2
-1.2
-1.7
-1.7
0.0
0.0
-1.9
-1.9
-1.9
-1.9
-1.9
-1.9
18 May 2017
3

Yes Bank
Exhibit 2: YES Bank: One year forward P/E
32.0
24.0
16.0
8.0
0.0
11.1
3.5
12.1
17.0
PE (x)
Median(x)
Peak(x)
Min(x)
Avg(x)
26.6
Exhibit 3: YES Bank: 1 year forward P/BV
6.0
4.5
3.0
1.5
0.0
2.2
2.2
0.5
2.9
PB (x)
Median(x)
Peak(x)
Min(x)
4.8
Avg(x)
Source: MOSL, Company
Source: MOSL, Company
Exhibit 4: Divergence in asset classification and provisioning for NPAs
Particulars
Gross NPAs as on March 31, 2016 as reported by the Bank
Gross NPAs as on March 31, 2016 as assessed by RBI
Divergence in Gross NPAs
Net NPAs as on March 31, 2016 as reported by the Bank
Net NPAs as on March 31, 2016 as assessed by the RBI
Divergence in Net NPAs
Provision for NPAs as on March 31, 2016 as reported by the Bank
Provision for NPAs as on March 31, 2016 as assessed by RBI
Divergence in provisioning
Reported PAT for the year ended March 31, 2016
Adjusted (notional) PAT for the year ended FY16 after taking into account the divergence in provisioning
INR b
7.5
49.3
41.8
2.8
36.0
33.2
4.6
13.2
8.6
25.4
19.8
Source: MOSL, Company
Exhibit 5: Divergence fully accounted for during FY17 (our estimates)
Divergence break up
Outstanding NPA (FY17)
Upgrades and recoveries during FY17
Sale to ARC
Repayment of loans
Total divergence
INR b
10.4
10
9
12.4
41.8
Source: MOSL, Company
18 May 2017
4

Yes Bank
Exhibit 6: Movement of GNPA (INR b)
Exhibit 7: O/s stock of gross stress loans at ~3% of loans
GNPA
8.5
26.3
3.7
1.4
9.5
20.2
7.5
10.7
1.5
0.2
0.5
0.8
FY16
Source: MOSL, Company
FY17
Source: MOSL, Company
OSRL
SDR
S4A
5/25'
3.0
0.7
0.1
0.2
0.4
1.5
SR
Exhibit 8: GNPL increase led by RBI divergence-related stress
additions; PCR declined to 47% v/s 62% in FY16
GNPL (%)
78.4
51.5
0.7
0.4
0.3
0.3
0.3
0.2
0.2
0.2
0.1
0.1
0.0
0.0
0.0
0.0
88.6
79.2
NNPL (%)
92.6
85.1
72.0
PCR (%)
1.5
46.9
0.8
Exhibit 9: Delinquency ratio spiked in FY17; all divergence
accounted for
Delinquency
Delinquency as a % of average loans
2.7
62.0
0.8
0.3
0.9
0.9
0.2
1.1 0.5
0.2
0.6
1.2
0.6
2.4
0.8
4.0
0.7
3.9
9.1
26.3
0.9
Source: MOSL, Company
Source: MOSL, Company
Exhibit 10: Provisioning well above RBI direction
NPL bucket
(INR m)
2,732
11,216
6,238
Minimum provision
requirement (%)
15%
25%
40%
100%
100%
Minimum provision
requirement (INR m)
410
2,804
2,495
Sub Standard Assets
D1
D2
D3
Loss Assets
Total NPA (Gross)
Actual provision
Surplus provisioning
20,186
5,709
9,463
3,754
Source: MOSL, Company
18 May 2017
5

Yes Bank
Exhibit 11: SA deposits grew 67% CAGR over FY12-17
SA as a % of deposits
CA as a % of deposits
13.4
9.8
9.9
5.1
10.0
9.0
9.5
12.6
9.3
13.8
18.3
22.9
8.7
13.2
10.5
10.3
15.0
18.9
22.0
50.5
29.7
27.9
Exhibit 12: Incremental CASA ratio was 66% in FY17
CASA ratio (%)
82.2
Incremental CASA ratio (%)
36.3
28.1
23.1
65.9
50.0
7.5
1.2
9.1
1.5
8.6
1.8
10.1
Source: MOSL, Company
Source: MOSL, Company
Exhibit 13: Incremental SA market share at 1.5%+ of system
SA deposits
SA market share (%)
Incremental SA market share (%)
1.8
1.4
0.45
0.56
2.0
0.97
0.77
1.6
Exhibit 14: Incremental CASA market share of 2.5%+; overall
share more than 1% of system CASA
CASA mkt sh (%)
2.2
Incremental CASA mkt sh. (%)
2.4
1.9
1.4
0.4
0.1
0.2
0.6
0.2
0.3
0.5
0.6
0.7
0.9
1.2
1.9
2.5
1.2
0.1
0.02
0.2
1.5
0.03 0.06
0.16
0.33
Source: MOSL, Company, RBI
Source: MOSL, Company, RBI
Exhibit 15: Cost of funds have fallen sharply since FY12
Avg. Yield-Earning Assets (%)
11.3
8.9
8.6
6.2
6.6
9.3
Avg. Cost-Int. Bear. Liab. (%)
10.5
10.5
10.6
10.6
10.0
9.5
Exhibit 16: Stable to improving NIMs
NIMs (%)
3.2
2.9
3.0
2.9
2.7
2.8
2.9
3.4
3.4
8.1
8.0
7.9
7.6
6.9
6.5
Source: MOSL, Company
Source: MOSL, Company
18 May 2017
6

Yes Bank
Exhibit 17: Productivity increasing with
higher branch maturity
Average SA/branch (INRm)
Exhibit 18: Average CA/branch
boosted by demonetization
Average CA/branch (INRm)
Exhibit 19: Consistently increasing
CASA/branch
Average CASA/branch (INRm)
Source: MOSL, Company
Source: MOSL, Company
Source: MOSL, Company
Exhibit 20: Average SA/branch higher
v/s emerging peers
Average SA/branch (INRm)
286
329
361
370
Exhibit 21: Average CA/branch on the
lower end v/s peers
Average CA/branch (INRm)
190
221
235
Exhibit 22: Average CASA/branch
lower than retail lenders
Average CASA/branch (INRm)
591
361
447
453
473
596
201
264
144
159
161
Source: MOSL, Company
Source: MOSL, Company
Source: MOSL, Company
Exhibit 23: Short-term maturity
deposits trending lower
Deposits (<1 year maturity,%)
85 83 83 84 81
73 68
63
Exhibit 24: Increasing trend of longer
maturity deposits
Deposits (>3 year maturity,%)
28
56
11
0
1
2
14
20
22
36
Exhibit 25: Average tenure of loans
and deposits (years) – gap narrowing
Loans
Deposits
Source: MOSL, Company
Source: MOSL, Company
Source: MOSL, Company
18 May 2017
7

Yes Bank
Exhibit 26: Granularity of deposits
increasing on the liability side
Deposit Concentration in Top 20
accounts (%)
Exhibit 27: Loan book granularity also
on an improving trajectory
Loan Concentration in Top 20 accounts
(%)
Exhibit 28: Few accounts constitute
bulk of the NPAs
Top 4 NPA concentration (%)
77
76
59
41
37
Source: MOSL, Company
Source: MOSL, Company
Source: MOSL, Company
Exhibit 29: Exposure to sensitive sectors (% of gross
exposure)
Real Estate
Capital Markets
10
9
7
3
3
FY11
FY12
FY13
FY14
FY15
FY16
FY17
4
2
7
8
Exhibit 30: Share of secured loans has increased to 74% v/s
68% in FY16 and just 37% in FY11
Secured loans (%)
Unsecured loans (%)
32
26
63
55
52
47
40
3
2
2
2
2
37
45
48
53
60
68
74
Source: MOSL, Company
Source: MOSL, Company
Exhibit 31: Significant capital consumption – RWA/Total
Assets increased to 87%
RWA/Total assets (%)
80.6
69
70.1
38
21
73.1
20
29
14
70.6
67.8
70.3
RWA growth (%)
75.9
35
80.4
86.6
40
29
Exhibit 32: Movement of risk-weighted assets
less than 100%
2
61
6
41
4
35
Equal to 100%
6
36
6
32
5
36
More than 100%
6
33
11
36
37
54
61
58
62
59
61
53
Source: MOSL, Company
Source: MOSL, Company
18 May 2017
8

Yes Bank
Exhibit 33: CET1 boosted by INR49b capital raising through
QIP in FY17
CET1
AT1
Tier 2
3.7
1.9
2.2
1.8
2.1
2.1
Exhibit 34: Return on risk-weighted assets maintained at
~2.1%+ throughout the cycle
RoRWA (%)
2.2
2.2
2.2
2.1
2.1
8.8
0.5
8.3
FY13
4.6
0.7
9.1
4.1
0.5
11.0
5.7
0.4
10.3
11.4
FY14
FY15
FY16
FY17
Source: MOSL, Company
Source: MOSL, Company
Exhibit 35: Strong branch expansion – productivity gains to
accrue with higher maturity
Number of branches
3.0
2.6
2.2
2.4
2.3
2.2
2.4
2.2
2.4
business per branch (INRb)
Exhibit 36: Manpower has doubled, led by higher feet on
street to establish retail foothold
Number of employees
165
128
96
148
143
business per employee (INRm)
139
137
126
121
117
150
214
356
430
560
630
860 1,000
Source: MOSL, Company
Source: MOSL, Company
Exhibit 37: Significant increase in employees/branch; cost
per employee on the higher end
Employees/branch
0.9
1.0
1.0
1.0
cost per employee (INRm)
1.0
1.0
1.0
1.0
Exhibit 38: ATMs have increased 3x since FY12
Number of ATMs
1,139
1,194
1,609
1,785
0.7
951
606
359
23
20
18
16
16
16
17
17
20
Source: MOSL, Company
Source: MOSL, Company
18 May 2017
9

Yes Bank
Exhibit 39: Investment phase reflected in increasing
operating expenses
Employee cost to assets (%)
1.1
1.0
0.9
0.8
0.8
0.7
0.7
0.7
0.9
0.8
0.8
0.8
0.8
0.9
0.9
52
40
35
Other opex to assets (%)
1.1
1.1
1.2
2.1
1.7
1.4
1.4
1.5
1.7
Exhibit 40: Cost metrics elevated; opex-to-assets has
increased to 2.2% v/s 1.4% in FY12
Cost to core income (%)
opex to assets (%)
2.0
2.2
1.9
38
40
41
42
42
45
Source: MOSL, Company
Source: MOSL, Company
Exhibit 41: Continued market share gains in a challenging
environment for corporate lenders
Mkt sh. in loans (%)
Incremental loan market share (%)
1.7
9.4
1.4
1.2
0.9
0.9
3.7
3.2
1.4
1.2
Exhibit 42: Loan mix (%) – corporate loans continue to be
dominant
Consumer
banking, 10
MSME, 12
0.4
2.1
0.7
0.9
1.7
0.8
0.5
Branch
Banking, 11
C&IB, 68
Source: MOSL, Company
Source: MOSL, Company
Exhibit 43: Transition from an investment-heavy book to
higher lending share
Loans as a % of assets
61
54
58
52
38
47
43
Investments as a % of assets
62
59
55
51
38
Exhibit 44: Bulk of the investment book concentrated in
government securities
Subsidaries,
0.1
Debentures
and Bonds,
22.2
Others, 6.1
31
28
32
32
30
23
Shares, 0.5
Investments
in Govt
Securities,
71.2
Source: MOSL, Company
Source: MOSL, Company
18 May 2017
10

Yes Bank
Exhibit 45: Other income at 2.2% of assets even as
proportion of off-balance sheet assets decreased
Contingent liabilities as a % of Total assets
2.2
Other income as a % of assets
1.9
1.3
1.3
1.5
1.7
1.7
1.8
2.2
Exhibit 46: Trading gains as a % of PBT increased to 14% v/s
7% in FY16
Trading gains as a % of other income
Trading gains as a % of PBT
12
8
4
3
10
7
7
5
10
7
17
14
292
291
231
219
250
184
248
200
176
Exhibit 47: Other income break-up (%)
Retail
fees, 24
Corporate
trade and
CMS, 10
Forex, debt
capital and
Securities,
25
Exhibit 48: Diversified retail fee income stream (%)
General
Banking, 27
Trade and
Remittance,
28
Corporate
banking
fees, 41
Interchange
fees, 21
Third party
sales, 14
Facility/Pro
cessing
fees, 11
Exhibit 49: High contribution of core fee income to assets
Core Fee income to assets
1.3
0.7
1.5
1.2
1.1
1.3
1.4
1.5
1.4
Exhibit 50: Wide gap between core PPoP and credit costs
Core PPoP as a % of assets
Credit cost as a % of assets
2.6
1.9
0.3
0.3
2.6
0.1
2.4
0.1
2.5
0.1
2.7
0.3
2.7
0.3
2.3
0.0
2.3
0.2
Exhibit 51: High RoA/RoE maintained throughout periods of consistent capital raising
RoA (%)
19.0
13.9
1.5
1.6
1.5
1.5
1.5
1.6
1.6
1.7
1.8
RoE (%)
20.6
20.3
21.1
23.1
24.8
25.0
21.3
19.9
18.9
1.4
1.2
Source: MOSL, Company
18 May 2017
11

Yes Bank
Exhibit 52: Key sector exposure as a % of total fund-based
exposure – Power dominant
Power
Infra excl. power
Construction
Metals
Chemicals
Food Processing
Gem & Jewellery
Vehicles
Cement
Engineering
2
2
2
Source: MOSL, Company
3
2
2
2
5
7
8
Exhibit 53: Growth in fund-based sector exposures (YoY, %);
sharp growth in construction sector (+160% YoY)
Construction
Cement
Textiles
Infra excl. power
Gem & jewellery
Power
Engineering
Metals
Food Processing
Mining & Quarrying
160%
146%
107%
50%
50%
47%
31%
28%
3%
-40%
Source: MOSL, Company
Exhibit 54: Key sector exposure as a % of total non-fund
based exposure –Infra accounts for 14% of total non-funded
Infra excl. power
Construction
Power
Metals
Chemicals
Engineering
Petroleum and Coal
Food Processing
Vehicles
Rubber and Plastic
14
13
12
6
6
5
4
3
3
1
Source: MOSL, Company
Exhibit 55: Growth in non-fund based sector exposures (YoY,
%); high growth in power (+117% YoY)
Power
Food Processing
Textiles
Construction
Infra excl. power
Metals
Engineering
Cement
Gem & Jewellery
40%
29%
29%
18%
16%
8%
-17%
Source: MOSL, Company
97%
117%
Exhibit 56: Key sector exposure as a % of gross exposure
Power
Infra excl. power
Construction
Metals
Chemicals
Engineering
Food Processing
Petroleum and Coal
Vehicles
Gem & Jewellery
9
9
7
4
3
2
2
2
2
2
Source: MOSL, Company
Exhibit 57: Growth in gross credit exposures (YoY, %)
Cement
Textiles
Construction
Power
Gem & Jewellery
Infra excl. power
Metals
Engineering
Vehicles
Food Processing
106%
91%
74%
66%
42%
40%
23%
23%
23%
20%
Source: MOSL, Company
18 May 2017
12

Yes Bank
Exhibit 58: Hiring rate on the rise –
bulk of the hiring on the ground
Hiring rate (%)
46.53
54.14
55.94
43
30
22
5
Exhibit 59: Changing profile of
employee base (%)
General management
Junior management
Middle management
Top and Senior management
40
32
23
5
37
47
15
2
Exhibit 60: Attrition rate on the rise
Attrition rate (%)
22.53
24.88
27.63
Source: MOSL, Company
Source: MOSL, Company
Source: MOSL, Company
Exhibit 61: O/s ESOPs as a % of total
shares
5.5
5.7
4.5
4.6
3.7
Exhibit 62: Number of ESOPs granted
as a % of total shares
1.3
1.2
0.9
0.7
0.4
Exhibit 63: Impact of fair value a/c for
ESOPs on PAT
2.2
2.1
1.8
1.6
1.4
Source: MOSL, Company
Source: MOSL, Company
Source: MOSL, Company
18 May 2017
13

Yes Bank
Financials and valuations
Income Statement
Y/E March
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)
2015
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
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
2017
57,973
26.9
41,568
99,541
36.8
41,165
58,375
35.7
7,934
50,441
17,140
34.0
33,301
31.1
6,324
51,263
26.8
2018E
74,785
29.0
46,407
121,192
21.8
51,457
69,735
19.5
8,528
61,207
19,892
32.5
41,315
24.1
8,423
62,623
22.2
2019E
95,286
27.4
57,472
152,758
26.0
64,321
88,437
26.8
11,941
76,496
24,479
32.0
52,017
25.9
10,605
81,324
29.9
(INR Million)
2020E
122,327
28.4
71,293
193,619
26.7
78,991
114,628
29.6
16,884
97,744
31,278
32.0
66,466
27.8
13,551
107,516
32.2
Balance Sheet
Y/E March
Share Capital
Reserves & Surplus
Net Worth
Of which Equity Networth
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
2015
4,177
112,622
116,800
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
2016
4,205
133,661
137,866
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
2017
4,565
209,383
213,947
213,947
1,428,739
27.9
518,697
65.5
386,067
121,846
2,150,599
195,494
500,318
2.4
1,322,627
34.7
6,835
125,325
2,150,599
2018E
4,565
242,274
246,839
246,839
1,757,348
23.0
646,325
24.6
437,427
146,136
2,587,750
143,340
600,382
20.0
1,692,962
28.0
6,943
144,123
2,587,750
2019E
4,565
283,687
288,252
288,252
2,249,406
28.0
856,551
32.5
510,982
175,401
3,224,041
163,051
720,458
20.0
2,166,992
28.0
7,798
165,742
3,224,041
(INR Million)
2020E
4,565
336,102
340,667
340,667
2,901,734
29.0
1,117,306
30.4
600,491
210,672
4,053,564
216,009
864,549
20.0
2,773,749
28.0
8,653
190,603
4,053,564
Asset Quality
GNPA (INR m)
NNPA (INR m)
GNPA Ratio
NNPA Ratio
Slippage Ratio
Credit Cost
PCR (Incl Tech. Write off)
E: MOSL Estimates
3,134
877
0.41
0.12
0.70
0.20
72.0
7,490
2,845
0.76
0.29
1.21
0.57
62.0
20,186
10,723
1.52
0.81
2.68
0.58
46.9
17,016
4,927
1.00
0.29
1.20
0.60
71.0
24,799
6,586
1.13
0.30
1.30
0.65
73.4
(%)
35,955
8,106
1.28
0.29
1.30
0.65
77.5
18 May 2017
14

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
RoRWA
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
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
2017
9.5
10.6
7.7
6.5
6.4
3.0
3.4
2018E
9.3
10.2
7.2
6.2
6.1
3.1
3.5
2019E
9.1
9.7
6.8
5.8
5.7
3.3
3.6
2020E
9.1
9.7
6.8
5.7
5.7
3.4
3.7
21.3
1.6
2.2
69.9
37.0
37.0
19.9
1.7
2.1
66.3
37.3
37.3
18.9
1.8
2.1
64.7
41.8
41.8
17.9
1.7
2.1
62.3
38.3
38.3
19.4
1.8
2.2
60.1
37.6
37.6
21.1
1.8
2.2
59.4
36.8
36.8
42.4
42.9
137.2
18.6
42.4
43.6
125.6
16.9
44.5
43.8
120.5
16.5
45.1
43.8
129.0
17.2
44.2
43.8
141.0
18.6
42.4
42.8
159.1
21.0
82.9
23.1
47.4
69.4
15.6
11.5
87.9
28.1
43.7
72.0
16.5
10.7
92.6
36.3
35.0
70.9
17.0
13.3
96.3
36.8
34.2
80.4
16.6
13.1
96.3
38.1
32.0
84.3
15.0
12.1
95.6
38.5
29.8
89.1
13.7
11.2
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
279.6
41.6
278.2
48.0
7.0
9.0
327.8
17.3
323.4
60.4
25.8
10.0
468.7
43.0
3.0
453.4
3.1
73.0
20.8
19.2
12.0
0.9
540.7
15.4
2.6
533.7
2.6
90.5
24.1
15.5
15.8
1.1
631.5
16.8
2.2
622.1
2.3
114.0
25.9
12.3
19.9
1.4
746.3
18.2
1.9
734.7
1.9
145.6
27.8
9.6
25.5
1.8
18 May 2017
15

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18 May 2017
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16