*****YES Bank Q4 Preview: Lender may report losses despite doubling of NII growth – The Economic Times

Clipped from: https://economictimes.indiatimes.com/markets/stocks/earnings/yes-bank-q4-preview-lender-may-report-losses-despite-doubling-of-nii-growth/articleshow/91198332.cms

Synopsis

Analysts said a further decline in the special mention account (SMA) book would be a key thing to watch for in the quarter. They believe that an eye on the progress of ARC, the vehicle that the bank would use to clear out its outstanding stock of non-performing loans (NPLs), would also be noteworthy.

NEW DELHI:

YES Bank

NSE 0.00 % is all set to report its March quarter results on Saturday. Many analysts expect the private lender to report losses, even as they see almost doubling of the net interest income (NII) in the March quarter amid a favourable base effect. Net interest margin (NIM) is seen improving sequentially.

The recent commentary has been healthy, with the bank reporting a 21 per cent year-on-year (YoY) rise in deposits and a 9 per cent YoY increase in advances for the quarter.

Analysts said a further decline in the special mention account (SMA) book would be a key thing to watch for in the quarter. They believe that an eye on the progress of ARC, the vehicle that the bank would use to clear out its outstanding stock of non-performing loans (NPLs), would also be noteworthy.

Stock Analysis

Stock score of Yes Bank Ltd is 3 on a scale of 10. View Stock Analysis »

Nirmal Bang Institutional Equities expects the bank to log a Rs 867 crore loss for the quarter, even as it sees more than doubling of the net interest income (NII) at Rs 2,069.60 crore.

Kotak Securities expects the private lender to report a loss of Rs 356.50 crore. This broking firm sees net NII jumping 89.9 per cent YoY (or 6.2 per cent QoQ) to Rs 1,873.30 crore in March 2022 quarter from Rs 986.70 crore in the same period last year. This is as the base quarter had a negative impact of interest income de-recognition.

NIM is seen at 3.2 per cent from 3.1 per cent in the December quarter and 1.9 per cent in the year-ago quarter.

“Business momentum is likely to remain weak on loan growth (8 per cent YoY) but deposit mobilisation (21 per cent YoY) continues to show strong momentum. Revenue growth pressure may remain high. Forecasting slippage and recovery trends would continue to remain challenging given the nature of these slippages that are chunky in nature and the various dispensations provided (restructuring, ECLGS, etc),” Kotak said.

Emkay Global expects the bank to report Q4 loss of Rs 1,200 crore. “Slower growth, soft margins and elevated higher credit cost could drive the bank to deep losses. Slippages remain elevated,” it felt.

ICICI Securities said improved collection trends, reduction in the overdue pool and better recoveries and upgrades should support a gradual decline in gross non-performing assets. For the quarter, it sees gross NPAs at 14.7 per cent, the same as the previous quarter.

It sees profit for the quarter at Rs 170 crore compared with a profit of Rs 266.40 crore in the December quarter and Rs 3,787.70 crore in the year-ago quarter. NII is seen growing 70 per cent at Rs 1,680 crore compared with Rs 986.70 crore in the same quarter last year.

ICICI Securities expects slippages at Rs 1,250 crore against Rs 1,418.60 crore in the December quarter and slippages per cent to come in at 0.7 per cent against 0.9 per cent sequentially. It sees gross non-performing assets as a percentage of total advances at 14.7 per cent against 14.2 per cent in the December quarter.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s