YES Bank Q3 result preview: Net profit, NII expected to see decent growth, say analysts

Private lender Yes Bank is expected to report decent set of numbers in Q3 FY24 on Saturday. Analysts have said that the bank can post good numbers as the bank’s asset quality is expected to remain stable due to the improvement seen in the recoveries in the past few quarters. The bank's focus has shifted towards rebuilding the business and the management commentary would be key.

In Q2 FY24, YES Bank posted a 47 per cent growth in net profit at Rs 225 crore. Total income from operations increased by 25 per cent to Rs 7,921 crore.

"We expect Yes Bank to come out with a healthy set of numbers in Q3 FY24 as the bank’s asset quality is expected to remain stable due to the improvement seen in the recoveries in the past few quarters. This can be further nominated by the SMA book remaining flattish sequentially. The traction in retail and MSME indicates that the bank is gradually picking up pace in strengthening its retail franchise. Also, traction on disbursements in retail and MSME segments was quite healthy in its Q3FY24 business updates," said Shreyansh V Shah, Research Analyst at StoxBox.

Brokerage Emkay said Yes Bank is expected to report a net profit of Rs 415.1 crore. The Net Interest Income (NII), which is difference between interest earned and interest expended, is expected to increase by 4.5 per cent Y-o-Y (up 5.3 percent Q-o-Q) to Rs 2,059 crore. While Pre Provision Operating Profit (PPOP) is likely to fall by 6.6 per cent Y-o-Y (up 2.7 percent Q-o-Q) to Rs. 853.4 crore. 

Kotak Institutional Equities said that the NII expected to grow 6 per cent YoY reflecting the underlying business growth. Business momentum is gaining traction across retail and MSME segments but overall loan growth to be lower than industry average. Deposit growth at 11 per cent YoY is meeting the business requirements but has significantly decelerated in recent quarters.

Brokerage Nomura is e[ecting the private lender to post a 508% YoY growth in the net profit and 4% growth in NII. It sees the pre-provision operating profit to decline 4% YoY to Rs 880 crore.

ICICI Securities expects profit to come in at Rs 503 crore, up 876 per cent (9.76 times). This brokerage sees NII at Rs 2,009.50 crore, up 2 per cent YoY. ICICI Securities sees slippages falling 25.5 per cent YoY to Rs 1,200 crore from Rs 1,610 crore YoY.  It sees NIM at 2.32 per cent against 2.3 per cent in September and 2.5 per cent in the same quarter last year.  

In Q2 FY24, NII declined 3.3 per cent to Rs 1,925 crore. Provisions and contingencies was at Rs 500 crore.

YES Bank shares have rised 19 per cent in last one month after registering a decent run at the bourses in the last six months. On Thursday, Yes Bank shares ended at Rs 24.88,  up by 0.81 per cent.

Also read: YES Bank shares rise ahead of Q3 results; check analyst expectations & target price