YES Bank Q4 Preview: Growth to moderate on weak treasury income, NIMs stable

The private sector lender is scheduled to release its earnings on Saturday.

YES Bank’s net profit for the March quarter is seen in the range of Rs 232-405 crore, compared with Rs 367 crore a year ago.

Net interest income, the difference between interest earned and interest expended, is seen in the range of Rs 1,933-2,215 crore.

Yes Bank’s total deposits rose around 11% on-year to Rs 2.18 lakh crore as of March-end, according to the provisional data it released earlier this month.

Its gross advances rose 11.3% on year and 5.2% sequentially to Rs 2.01 lakh crore.

Shares of the lender have been a big underperformer in 2023, as it dropped nearly 20%. However, much of this fall has been triggered by expectations of stake sale by peer lenders following the expiry of the 3-year lock-in period. Following is a summary of analysts’ expectations for the March quarter:

Kotak Institutional Equities
The brokerage expects NII to grow 6% YoY, reflecting the underlying business growth. Business momentum is gaining traction across retail and MSME segments, but overall loan growth will be lower than industry average at 11% YoY.

Deposit growth at 11% YoY is meeting the business requirements, but has significantly decelerated in the recent quarters.

It expects NIM to be stable sequentially at 2.5%. Revenue growth pressure to remain high especially led by weak treasury income.

One should see traction on recovery and upgrades this quarter, but the impact on earnings is likely to be difficult to forecast given the nature of provisioning policies likely to be adopted and the recovery rates recorded on these transactions.

Focus is shifting towards rebuilding the business for the bank and most conversations would be on growth and return to normalised levels of business operations.

Emkay Global Financial
It anticipates better growth and some normalization of credit cost to increase profits on a sequential basis. It also expects slippages for the bank to be moderate in comparison to the levels in the December quarter.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)