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Nomura
YES Bank (Buy)
CMP: ₹1,111.75
Target: ₹1,300
YES Bank, India’s fifth largest private sector bank, is an outcome of the professional entrepreneurship of its Founder Rana Kapoor and his highly competent top management team, to establish a high quality, customer-centric, service-driven, bank catering to the ‘Sunrise Sector of India’. YES Bank is the only Greenfield Bank license awarded by the RBI in the last two decades, associated with the finest pedigree investors.
YES Bank’s asset quality has held up better than most corporate banks and RBI’s asset quality review added credibility to the bank’s asset quality performance. We will continue to see exits from stressed names by YES Bank, driven by self-liquidating collateral. Also the bank is delivering well on its retail liability franchise and we expect a similar scale up on the assets side as well.
With low corporate asset quality risk and an improving retail franchise, YES Bank’s valuations have more scope for re-rating, in our view.
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