Yes Bank (YES), incorporated in 2004, is a private Indian bank. It is promoted by Mr. Rana Kapoor with financial support of Rabobank and Global investor – AIF Capital and Chrys Capital. Despite competition from well established private banks, it has been able to grow its balance sheet at steady pace. The bank’s advances have grown at healthy CAGR of 32% over FY2010-18. It has branch network of 1,100 (Q4FY18 end) and CASA ratio of 37%. Corporate lending forms 67.9% of advances and commercial/retail 32.1%.

Outlook & Valuation: We expect YES Bank to grow its advances at CAGR of 32% over FY2018-20E. Improvement in CASA, rating up-gradation and in-house priority sector lending would support NIM going forward. At CMP, YES trades at 2.4x FY20E P/ABV, which we believe is attractive considering growth prospects, hence, we recommend BUY with a target price of `435 over the next 12 months.

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