YES Bank Q3 result preview: Profit may jump multifold; muted NII growth seen

Private lender YES Bank’s net interest income (NII) in the third quarter ended December 2023 could either remain flat or see a decline on a year-on-year (YoY) basis. The muted NII growth is due to slower loan growth and the rising cost of funds.

NII for the December quarter is seen growing 2% YoY, while net profit is likely to jump multifold in the reporting period.

YES Bank reported a 12% growth in its advances at Rs 2.17 lakh crore in the third quarter, compared with Rs 1.94 lakh crore in the last year period. On a sequential basis, deposits rose 4%.

Deposits in the October-December period were up 13% YoY to Rs 2.41 lakh crore. The same was up 3.2% quarter-on-quarter (QoQ).

In the preceding September quarter, YES Bank posted a 47% growth in net profit at Rs 225 crore. Total income from operations increased by 25% to Rs 7,921 crore.

Net interest income, the difference between interest earned and interest expended, declined 3.3% in the second quarter to Rs 1,925 crore. Provisions and contingencies was at Rs 500 crore.

Here’s what brokerages expect from YES Bank’s Q3

Analysts said the business momentum is gaining traction, primarily in the retail and MSME segments, but overall loan growth is likely to be lower than the industry average.”Deposit growth at 13% year-on-year is comfortably meeting business requirements. We expect NIM at 2.7%, but there is likely to be a lot of volatility, given the nature of income booked when security receipts mature,” said Kotak Equities.

Leading brokerage Nomura is pencilling in a massive 508% YoY growth in the bank’s net profit and 4% growth in net interest income. It sees the pre-provision operating profit to decline 4% YoY to Rs 880 crore.

“We should see healthy traction on recovery and upgrades this quarter. Earnings impact is difficult to forecast, given the nature of the provisioning policy,” Kotak said.

YES Bank shares have had a healthy run at the bourses in the last six months, returning close to 50% to investors. In the past one month, the stock has risen 19%.

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