YES Bank’s Q3FY25 results are anticipated to demonstrate steady performance with a flat net interest margin.
YES Bank Q3 Result Expectations:
Investors may be reminded of YES Bank’s Q2 performance, characterized by a robust year-over-year (YoY) increase in profit, by the company’s October-December quarter (Q3) earnings. However, on a quarter-over-quarter (QoQ) basis, the bank’s profitability would be weak because the lender’s Q3 net interest margin (NIM) might remain unchanged. Investors will concentrate on profitability, asset quality ratios, and management’s remarks about the future, even though analysts generally anticipate the bank to post steady performance for Q3FY25.
On Saturday, January 25, YES Bank is scheduled to reveal its Q3 results. YES, the Bank released its Q3 business updates during the first week of January. The bank reported loans and advances of ₹2,45,035 crore, up 12.60 percent YoY versus ₹2,17,523 crore and up 4.20 percent QoQ against loans and advances of ₹2,35,117 crore. Deposits at the bank totaled ₹2,77,199 crore in Q3FY25, which was 14.60 percent more than the ₹2,41,831 crore recorded in Q3FY24. Experts anticipate steady Q3 earnings for YES Bank, citing the lender’s Q3FY25 business updates. However, most expect NIM to face pressure due to a lack of compliance with priority sector lending (PSL).
“This quarter, YES Bank is expected to provide consistent performance. However, a lack of PSL compliance, which is now attributed to low-yielding investments (rural infrastructure development fund, or RIDF), may put some pressure on NIM and is probably going to continue to be a problem in the longer run, according to Abhishek Pandya, a research analyst at StoxBox.
Pandya emphasized that according to YES Bank’s preliminary data, deposits have grown more than advanced, demonstrating that the bank is taking preventative measures in the future, especially given the strain in the banking industry’s microfinance institution (MFI) and unsecured lending segments.
Additionally, as security receipts mature, Pandya anticipates continual advancements in loan recovery and enhancements.
Senior technical analyst Pravesh Gour of Swastika Investment noted that YES Bank had previously shown perseverance by steadily raising its quarterly profits.
The emphasis is on asset quality ratios and profitability, even though the Q3 figures indicate a profit increase.
Gour thinks the PSL compliance issue, now parked in low-yielding investments (RIDF), may result in a subdued NIM for the banking player for Q3FY25. Over the longer run, this shortage will likely continue, which might strain NIM.
Gour brought attention to YES Bank’s Q3 report, which showed a robust YoY rise in deposits of 14.6% and a YoY increase in loans and advances of 12.60%.
“The bank’s loan book has consistently grown, indicative of strong demand and effective risk management. Gour said that positive customer satisfaction and acquisition statistics are solid business underpinnings.
For Q3FY25, brokerage firm SMC Global Securities anticipates tES Bank will report a flat QoQ and double-digit YoY rise in NII.
As the bank’s deposit growth was nearly zero sequentially, the brokerage company noted that the December quarterly updates showed that the bank’s loan and advances growth were more significant. Additionally, on a QoQ basis, the credit-to-deposit ratio increased by 360 basis points, demonstrating the bank’s capacity to sustain strong loan book growth during a period of slowed consumer demand.
Overall, SMC Global anticipates that YES Bank will post reduced NIM due to a PSL compliance shortfall and flat NII growth sequentially.
“NII is anticipated to increase by 10.2% year over year and 0.87 percent quarter over quarter to ₹2,219.2 crore. In the third quarter, the net profit is expected to grow by 142.16 percent year over year and 1.15 percent quarter over quarter to ₹559.4 crores. According to SMC Global, the net interest margin (NIM) may stay at 2.4%.
