Mumbai: Shares of YES Bank rose nearly 2 per cent in Monday’s session as the private lender returned to profit in the quarter ended September from a year ago.
At 9:51 am, YES Bank shares were up 1.80 per cent at Rs 13.59 on the BSE while benchmark Sensex dropped 0.19 per cent to 40,608.
On Friday, YES Bank reported a net profit of Rs 129.4 crore for the September quarter against a loss of Rs 600 crore in the year-ago period. In the quarter ended June, it had reported Rs 45.44 crore profit.
“There are initial signs of recovery, but uncertainty around incremental corporate book stress, selling restrictions on private banks and management reshuffle preclude any meaningful assessment of business direction and residual net worth valuation,” Edelweiss analysts said in a note on Monday, adding that they were keeping the stock “under review”.
They added that deposit accretion and asset quality are the key elements to monitor, along with stakeholder confidence.
The lender’s net interest income (NII) rose 3.4 per cent sequentially to Rs 1,973 crore in Q2 from Rs 1,908 crore in the previous quarter. On year-on-year (YoY) basis, NII was down by 9.7 per cent from the base of Rs 2,186 crore in the second quarter of the previous year.
Its provisions rose 9.3 per cent sequentially in Q2 to Rs 1,187 crore but were down 11.1 per cent over the same quarter of 2019.
Asset quality showed marginal improvement as gross non-performing assets (GNPAs) stood at 16.9 per cent in Q2 from 17.3 per cent in Q1.
“While there was traction in deposits and loans sequentially, on a YoY basis the decline continues to be steep. Yes Bank reported low slippage of 0.24% due to the SC order. Slippage would have been higher at 6% had it not been for the order. We estimate total collection efficiency of 70-77%, which is low, and a risk to future asset quality,” Elara Capital said in a note.
Credit: Stocks-Markets-Economic Times