Yes Bank Shares Jump on Strong Q1 Earnings, But Sequential Growth Remains Flat

Yes Bank shares soared on Wednesday following the release of their strong first-quarter earnings report. The stock closed up by 6.81% at ₹152.75, marking a significant jump from the previous day’s closing price. This positive performance was driven by strong loan growth and a healthy improvement in asset quality.

Here’s a closer look at the numbers that fueled the surge:

• Net profit: Yes Bank reported a net profit of ₹1,435 crore for the April-June quarter, a significant increase of 113% compared to the same period last year. This robust growth can be attributed to a sharp decline in provisions for bad loans.

• Net Interest Income (NII): NII, a key metric for banks, increased by 21% year-on-year to ₹3,004 crore, reflecting healthy loan growth and improved margins.

• Gross Non-Performing Assets (GNPA): Yes Bank recorded a GNPA ratio of 1.36% as of June 30, 2023, demonstrating a significant improvement from 2.38% a year ago.

However, a closer analysis reveals a more nuanced picture. While the year-on-year growth is impressive, the sequential performance shows a flattish trend.

• Net profit: The net profit remained largely flat compared to the previous quarter, raising questions about the sustainability of the strong growth momentum.

• NII: NII also showed minimal sequential growth of just 1% compared to the previous quarter.

Despite the flattish sequential growth, the robust Q1 numbers paint a positive picture for Yes Bank. The improved asset quality and strong loan growth signal a positive trajectory for the bank. However, investors will be closely watching the upcoming quarters to gauge the sustainability of this growth momentum and assess the bank’s ability to maintain its strong performance.

Keywords: Yes Bank, Q1 Earnings, Shares Gain, Robust, Flattish Growth, Sequential Growth, Loan Growth, Asset Quality, Net Profit, Net Interest Income, NII, GNPA, Sustainability

Sentiment: Positive overall, but tempered by concerns about flattish sequential growth.