Yes Bank Shares Gain On Robust Q1 Numbers, But Flattish Sequential Growth Weighs

Shares of Yes Bank were climbing on Wednesday following a robust first-quarter update, showcasing steady earnings and improving asset quality.

However, on a sequential basis, the numbers weren’t as promising.

What Happened: The private lender reported a 15% year-on-year growth in loans and advances for the first quarter ended June, with loans reaching ₹2.29 lakh crore compared to ₹2 lakh crore in the same quarter last year.

Deposits saw a 21% increase year-on-year, climbing to ₹2.64 lakh crore from ₹2.19 lakh crore a year earlier.

The bank’s credit-to-deposit ratio dropped to 86.4% for the first quarter, down from 91.3% in the same period last year. The liquidity coverage ratio improved to 137.8% in the June quarter.

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However, deposits shrank slightly to ₹2.65 lakh crore, down 0.5% from ₹2.67 lakh crore logged in the previous quarter, somewhat dampening hopes of continued growth.

Improvement Trajectory: In the March quarter, Yes Bank posted a 123% year-on-year surge in profit, reaching ₹452 crore, with net interest margins (NIMs) steady at 2.4%.

The bank’s balance sheet crossed the ₹4 lakh crore mark during the fourth quarter of the previous fiscal year, driven by growth in SME and mid-corporate advances and renewed growth in the corporate segment.

Last week, reports suggested the bank was conducting wide-scale layoffs to reduce operational costs and boost operating profit.

Price Action: Yes Bank’s share price was up 0.88% at ₹24.06 in early morning trade on Wednesday. The stock has gained only 6.23% this year, underperforming an 11.7% gain in the Nifty 50.

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