FinQuest Securities has maintained buy rating on Yes Bank in its report dated February 26, 2010.
"With improved economic scenario and better visibility on the credit growth front, we expect Yes Bank to post superior business growth. The bank's advances have grown at CAGR of 72% (FY06-FY09) compared to 22% CAGR growth in the industry. Going forward, we expect advances to grow twice the growth of industry (48% CAGR over FY09-FY12E). Yes Bank has grown its branches from 40 in FY06 to 127 in FY10E (till Dec09). The bank has ambitious plans to roll out 100 branches in FY11E (applied for ~100 branch licenses) and increase overall branch count to 750 by FY15E. Yes Bank is favorably placed in the rising interest rate scenario due to negative asset liability duration. We expect earnings to grow at a CAGR of 39% over FY09-FY12 led by 43% CAGR growth in the net interest income. We initiate coverage on Yes Bank with a BUY rating, "says FinQuest Securities research report.
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