YES Bank Q1 Preview: Soft quarter expected on weak underlying business; PAT may fall up to 9%

Kotak Institutional Equities is estimating 6% YoY rise in NII at Rs 1,968 crore. Meanwhile, net profit is likely to fall 4% year-on-year to Rs 298 crore. Yes Bank had reported a 8% year-on-year jump in loans to Rs 2 lakh crore for the quarter ended June. However, the figure was up just 0.1% sequentially. The advances growth, too, normalised for ARC transactions, witnessing a 10% YoY and 0.1% QoQ rise.

In the preceding March quarter, the lender saw 45% drop in net profit to Rs 202 crore as provisions increased.

NIMs during the quarter are estimated at 2.8%, a decline of 30 bps QoQ, but there is likely to be a lot of volatility, according to analysts, given the nature of income booked when security receipts mature.

Here’s what brokerages expect from YES Bank’s Q1

Kotak Institutional Equities
Business momentum is gaining traction across retail and MSME segments but overall loan growth will be lower than industry average at 8% YoY. Deposit growth at 13% YoY is meeting the business requirements. We should see healthy traction on recovery and upgrades this quarter.

Earnings impact is difficult to forecast given the nature of provisioning policy. Focus is shifting towards rebuilding the business for the bank. Conversations would be on growth and return to normalized levels of business operations.Nuvama
Based on its soft business update, we expect YES Bank to post muted numbers quarter with weak loan and fee growth and decline in sequential NII.

ICICI Securities
The brokerage estimates 12% year-on-year growth in NII at Rs 2,074 crore, while there could be 1.5% drop on a sequential basis. Profit growth is likely to decline nearly 9% YoY at Rs 282 crore.

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