YES Bank Q4 Preview: Stable NIMs, moderated growth on weak treasury income

Yes Bank Plans ₹25 Billion Debt Raise

YES Bank’s Q4 Earnings Growth Expected to be Moderate with Stable Margins and Moderating Credit Costs

YES Bank’s earnings growth is expected to be moderate in the March quarter due to weak treasury income and deceleration in deposit growth, but stable margins and moderating credit costs provide some relief.

The private sector lender is set to release its earnings on Saturday, with analysts projecting a net profit of Rs 232-405 crore compared to Rs 367 crore a year ago. Net interest income is estimated to be in the range of Rs 1,933-2,215 crores.

YES Bank’s total deposits increased by around 11% YoY to Rs 2.18 lakh crore as of March-end, while gross advances rose 11.3% YoY and 5.2% sequentially to Rs 2.01 lakh crore. However, shares of the lender have dropped by nearly 20% due to expectations of stake sales by peer lenders following the expiry of the 3-year lock-in period.

Kotak Institutional Equities expects NII to grow 6% YoY, reflecting underlying business growth, with stable NIM sequentially at 2.5%. Emkay Global Financial anticipates moderate slippages and a normalization of credit costs to increase profits sequentially.

Despite these projections, the impact on earnings is difficult to forecast given the nature of provisioning policies likely to be adopted and the recovery rates recorded on these transactions. Nevertheless, the bank’s focus is shifting towards rebuilding its business, with conversations centered on growth and a return to normalized levels of operations.

About YES Bank:

Founded in 2004 by Rana Kapoor and Ashok Kapoor, Yes Bank is a Mumbai-based Indian bank.

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