YES Bank Q1 results preview: Will the private lender pull of a surprise? Check brokerage projections

YES Bank is scheduled to report its earnings for the quarter ended on June 30, 2023 on Saturday, July 22. The private sector private lender is likely to report a mixed set of numbers in the given quarter. Also, there is much divergence for the bottomline of the bank, considering the higher cost of funds.

However, analysts expect that management commentary, provisioning figures, earnings guidance and margins will be the key factors to be monitored in the coming quarter for the cash-strapped lender. Return to the normalization of business may boost the outlook for the lender.

Analysts are expecting YES Bank to report a growth in net interest income (NIIs) on a year-on-year (YoY) basis, while its quarter-on-quarter numbers (QoQ) may remain subdued. Net interest margins (NIMs) are likely to contract by 10 basis points (bps) on a sequential basis, with core pre-provisioning operating profit (PPOP) is seen arounds Rs 700-730 crore.

Kotak Institutional Equities expect NII to grow 6 per cent YoY reflecting the weak underlying business growth. Business momentum is gaining traction across retail and MSME segments but overall loan growth will be lower than industry average at 8 per cent YoY. "We expect NIM at 2.8 per cent, but there is likely to be a lot of volatility given the nature of income," it said.

Kotak expects NIIs at Rs 1,969 croore, up 6 per cent YoY and down 6 per cent QoQ. PPOP is seen at Rs 729 crore, up 24 per cent YoY but down 18 per cent QoQ. The brokerage pegs PAT at 299 crore, up 48 per cent QoQ, but down 4 per cent YoY.

"We should see healthy traction on recovery and upgrades this quarter. Earnings impact is difficult to forecast given the nature of provisioning policy. Focus is shifting towards rebuilding the business for the bank. Conversations would be on growth and return to normalized levels of business operations," it added.

Before its results, Shares of YES Bank gained about a per cent to Rs 17.89 on Friday, commanding a total market capitalization close to Rs 51,500 crore. The scrip had settled at Rs 17.73 on Thursday, rising about 3 per cent for the day. The scrip is up 12 per cent in the last one month.

Based on its soft business update, Nuvama Institutional Equities expects YES Bank to post a soft quarter with weak loan and fee growth and decline in QoQ NII. It pegs NIIS at Rs 2,020 crore, up 9 per cent YoY but down 4 per cent sequentially. Margins may slip 10 bps QoQ to 2.70 per cent.

"Core PPOP is seen at Rs 710 crore, falling 26 per cent sequentially but up 13 per cent YoY but PAT is seen at Rs 210 crore, slumping 33 per cent YoY and maringally up QoQ. However, provisions may decline 11 per cent QoQ to Rs 550 crore in the Q1FY24," said Nuvama.

ICICI Securities pencils YES Bank's NIIs at Rs 2,074 crore, up 12 per cent YoY but slightly lower QoQ. PPoP is seen at Rs 590 crore, falling 17 per cent QoQ and rising 25 per cent YOY. PAT may come in at Rs 310 crore, 39 per cent QoQ but down 9 per cent YoY. NIMs may expand 30 bps to 2.4 per cent in Q1FY24.

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