Analysts retained a mixed view on YES Bank after the lender on Saturday posted a net profit of Rs 367.46 crore for the quarter ended March 31 against a loss of Rs 3,787.75 crore in the same quarter a year ago. The bottom line was up 37.91 per cent on a quarter-on-quarter (QoQ) basis.
Shares of YES Bank traded 1.54 per cent higher at Rs 13.84 at around 12.38 am (IST), while the benchmark BSE Sensex was down 0.31 per cent at 56,882.
YES Bank said its net interest income (NII) grew 84.4 per cent year-on-year (YoY) to Rs 1,819 crore from Rs 987 crore in the same quarter last year. Non-interest income advanced 27.9 per cent YoY to Rs 882 from Rs 689 crore. Provisions declined sharply 94.70 per cent YoY to Rs 271 crore.
ICICI Securities retained a ‘Hold’ rating on YES Bank with a target price of Rs 14. The brokerage believes that the revamped leadership (leveraging on the backing of leading shareholder banks, changed governance and underwriting framework) is stabilising and turning around YES Bank from its downcycle.
“This is evident from its better-than-expected operating performance since past three quarters,” ICICI Securities said.
Return on equity also improved to 4.3 per cent in Q4FY22 over 3.2 per cent in Q3FY22 and -43.20 per cent in Q4FY21. Net interest margin stood at 2.5 per cent for the quarter ended March 31 against 2.4 per cent in the sequential quarter ended December 31 and 1.6 per cent in the same quarter a year ago.
Commenting on the results and financial performance, Prashant Kumar, MD and CEO, YES Bank said, “This transformation journey taking place at YES Bank has resulted in a sustained improvement in balance sheet growth, accelerated granularisation, improving asset quality trends, enhanced liquidity and stronger capital position over the past 2 years. While the core operating profitability of the franchise continues to improve, the drag from legacy stressed assets has significantly reduced, resulting in net profitability.”
On the other hand, Nirmal Bang Securities maintained a ‘Sell’ rating with a target price of Rs 12.80. “Subdued return ratios of the bank, coupled with attractive valuations of large-cap banks make it challenging to make a favourable case for YES Bank currently,” the brokerage said in a report.
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