Girish Pai

Nirmal Bang

Equity Bottom-Up

<p>4QFY21 Result Update</p>
<h2>Yes Bank</h2>
<h3>Huge loss driven by interest reversals and accelerated provisioning</h3>
<p>Yes Bank’s 4QFY21 performance was extremely weak on account of significant interest reversals and high provisioning. Due to accelerated provisioning, loan book declined by 1.7% QoQ (otherwise up 2% QoQ on gross basis). Operating profit was down 98% YoY and 92% QoQ. Interest reversals were larger than expected, leading to NIM contraction of 180bps QoQ to 1.6%. Reversals due to NPA recognition were…</p>

<p>3QFY21 Result Update</p>
<h2>Yes Bank</h2>
<h3>Here we go, again!</h3>
<p>Yes Bank (YBL) reported an operational performance which was ahead of our estimates on the back of better NIM, higher non-interest revenue and better cost control. However, these positives were more than offset by the surprise on the asset quality front. The bank has disclosed total stress (net of total provisions) of Rs385.8bn, which is 23% of the total advances and 104% of the current equity capital. Out of this stressed pool, Rs80.6bn is where…</p>

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<p>2QFY21 Result Update</p>
<h2>Yes Bank</h2>
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<h3>Trends improving but RoA target overstated; Resume with a SELL</h3>
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<p>Yes Bank’s 2QFY21 financial performance improved sequentially as net profit grew by ~185% (QoQ) on the back of expansion in NIM (~10bps QoQ), better traction in non-interest revenue and opex control (down 4.5% QoQ). Provisions for the quarter were mostly towards building the covid-19 impact related buffer, which now stands at Rs19.2bn. Given the SC ruling halting recognition of NPAs, GNPAs…</p>
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<p>1QFY21 Result Update</p>
<h2>Yes Bank</h2>
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<p><strong>Challenging macros could pose asset quality risks</strong></p>
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<p>Yes Bank reported 1QFY21 results with NII at Rs19,081mn, down 16% YoY but up 50% QoQ. Non- interest income declined by 51% YoY primarily due to lower retail banking fee, which declined by 65% QoQ. Employee expenses were down 3% YoY/up 1% QoQ. 22% QoQ decline in operating expenses was led by cost rationalisation initiatives and lower business volume. Loan sourcing fees &amp; professional fees declined by 42%…</p>
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<p>FPO Update</p>
<h3>Yes Bank</h3>
<p>Cheap pricing comes with a baggage of uncertainties; AVOID</p>
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<p>Yes Bank hosted a virtual conference on the occasion of its Rs150bn capital raise. Incremental key takeaways were not much. The management commentary was mostly a repetition of the previously stated strategy, which includes transferring stressed assets to a separate vertical, for which a subsidiary will be formed with possible equity participation by other stressed asset investors. We maintain our view that…</p>
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India

YES BANK Limited provides banking services. The Bank offers deposits, personal loans, e-banking, trade finance, corporate, and business banking services. YES BANK serves the food and agribusiness, life sciences, healthcare, biotechnology, telecommunications, media, information technology, and infrastructure development industries in India.

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