Yes Is Banking Firmly As Of Now

Among the new age private banking players, Yes Bank has by now managed to find its rightful place in the sector as a close contender for the top players post. It today announced its December quarter results. Its profit after tax for Q3FY14 stood at Rs 416 crore, up 21.4% on a yearly basis. This was primarily aided by a better than expected increase in its non-interest income, which jumped by 23.9% on a yearly basis and stood at Rs 388 crore. 

Non-interest income forms 36.8% of the total income for the Bank. The same was 34.9% during the corresponding period. Net Interest Income (NII) increased at a slower pace of 13.9% on a yearly basis and actually fell by 1% on a sequential basis. Advances for the quarter increased by 14.7% on a yearly basis while deposits increased by 20.7%. Net interest margin (NIM) of the bank declined by 10 basis points on yearly basis and remained constant on a sequential basis at 2.9% for Q3FY14. 

Yes Bank has one of the best asset quality in its category but has seen small little signs of stress on its asset quality. The gross non-performing assets (NPA) of the bank in absolute terms have increased by 157% to Rs 196 crore for the quarter on a yearly basis. As a percentage of its gross advances it has more than doubled and increased to 0.39% in Q3FY14 against 0.17% during the year ago period and 0.28% in Q2FY14. 

Even on the net NPA front the bank witnessed an uptick in its non-performing assets both on a sequential as well as on a yearly basis. Its Net NPAs for the quarter (Q3FY14) stood at Rs 42.31 crore up by 172% on yearly basis (118% on sequential basis). As a proportion to its total advances they stood at a mere 0.08% for Q3FY14 against 0.04% in Q3FY13.

Shares of the bank closed at Rs 353 in today’s trade up by 1.95%. Currently the shares of bank are trading at price to book value of 1.8 times, which looks fairly valued.