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YES Bank likely to post drop in Q4 profit; shares trading higher

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NEW DELHI: YES Bank will come out with its March quarter earnings on Friday.

The private lender is expected to report a degrowth in profit despite healthy expansion in net interest income (NII).

Analysts said the commentary from new Managing Director and CEO Ravneet Gill will be crucial. Elara Capital expects the bank to report a 7.2 per cent year-on-year (YoY) drop in profit after tax (PAT) at Rs 10,950 crore while ICICI Securities expects a 2 per cent drop in the bottom line at Rs 11, 588 crore. Shares of the lender traded half a per cent higher at Rs 239 in morning trade on Friday. Prabhudas Lilladher expects NII to rise 30.2 per cent YoY to Rs 2,804.70 crore and projects provisions to jump 35.1 per cent to Rs 539.90 crore.

Margins may expand sequentially by 5 basis points to 3.35 per cent.

Gross non-performing assets (NPAs) may remain stable at 2.11 per cent. “The new MD at the helm should guide investors on the path ahead for the bank, especially on capital raising, asset quality and provision coverage ratio (PCR).

We expect 25 per cent YoY loan growth as the base quarter remains high, while NII is likely to be better but fee and other income will be much lower.

We are also building higher credit cost as the bank will look to enhance its PCR ratio,” Prabhudas Lilladher said. Elara Capital said it does not expect any large corporate slippage.

However, seasoning of non-performing loans (NPL) and provisions thereon would keep the provisioning baggage heavy for a few more quarters. ICICI Securities expects an 82 per cent rise in provisions at Rs 726.90 crore sees a 12 per cent drop in other income at Rs 1,245 crore.




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