YES Bank Q2 results today: Profit or loss? Analyst views differ

NEW DELHI: Analyst views differ widely on YES Bank's bottom line in September quarter, but all agree the private lender may see a spike in slippages, a fall in net interest income (NII), a contraction in net interest margin (NIM) and rise in credit cost for the quarter.

The private lender, where small retail investors held 27.43 per cent stake and HNIs owned another 7.85 per cent stake as of September 30, will report its quarterly numbers on Friday.

Brokerage Anand Rathi said slippages may remain high for the bank, but believes higher provisions will be offset by significant recoveries from DHFL. It expects the lender to report a profit of Rs 448.40 crore for the September quarter. The brokerage sees NII falling 8.6 per cent YoY to Rs 1,803 crore and NIM falling 60 basis points YoY to 2.5 per cent. The brokerage projected net NPA for the quarter at 5 per cent, up 30 basis points YoY.

Elara Capital sees YES Bank profit at Rs 256.80 crore for the quarter on a 21.8 per cent YoY fall in NII at Rs 1,542.40 crore. Emkay Global projects YES Bank profit at Rs 152.70 crore compared with Rs 129.4o crore profit a year ago. This brokerage sees NII falling 22 per cent YoY to Rs 1,536 crore.

"Lower margins and elevated provisions should keep profits in check. Stress to remain elevated," it said.

Nirmal Bang Institutional Equities is expecting the private lender to report a loss of Rs 424.50 crore for the quarter as it sees net interest income (NII) falling 25 per cent YoY to Rs 1,480 crore.

YES Bank's loans and advances grew a mere 3.6 per cent YoY to Rs 1,72,945 crore for the quarter, even as bigger peers such as ICICI Bank, HDFC Bank and Axis Bank clocked double-digit growth in loans during the same period.

Deposits for the bank, meanwhile, were up 30.1 per cent for the quarter, the highest among peers.

Nirmal Bang sees the bank's NIM may contract 123 basis points YoY (up 5 basis points QoQ) to 2.4 per cent. It sees credit cost rising for the bank to 2.6 per cent, up 26 basis points YoY or 135 bps QoQ.