c We value the stock on a two-stage Gordon growth model using P/BV.
Yes Bank reported Q1FY15 PAT of R440 crore, up 10% y-o-y. Margins and asset quality remained stable sequentially. However, customer asset growth has slowed to 16% y-o-y in Q1FY15 (credit substitutes declined by 8% y-o-y). Management stated that loan growth should be in the range of 16-18% in FY15. Retail loan growth (up 40% y-o-y in Q1FY15) will be higher but it is unlikely to change overall loan growth projections due to the low base.
Net interest margin remained stable in the quarter at 3%. Management said this is mainly because loan growth picked up in June and capital-raising benefit will occur fully in Q2FY15. Management expects margins to go up by 15-20 bps in Q2/Q3FY15.
Gross NPLs rose 13% sequentially to R200 crore. Although net NPA rose 64% q-o-q on a low base, it was merely ~7 bps of loans. Restructured loans remained at R110 crore — 0.2% of total loans. Total stressed assets, including restructured assets, stand at a very low level of 0.27%. Against this, total provisions for loans carried in the balance sheet stood at 40 bps of loan as of June 2014. The company did not sell any bad loans to ARC in the quarter. ARC book stands at R170 crore as of June 2014 (flat q-o-q). The bank provided R19 crore for unhedged foreign currency exposure in Q1FY15.
Saving deposits grew 44% y-o-y. The bank added ~100 branches last year (20% of the total). Casa ratio now stands at 22.3% — up 210 bps y-o-y.