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EconomyBanking

YES Bank reports on Saturday with investors watching for the AT-1 bond hit

Brokerages expect profit to rise sharply on strong loan growth. The bigger question is what the Supreme Court's revival of ₹8,415 crore of written-off bonds means for the bank's capital.

From the editorial desk · MumbaiPublished
Bombay Stock Exchange, Mumbai (file photo)
Bombay Stock Exchange, Mumbai (file photo)Photo: Appaiah / Wikimedia Commons, CC BY-SA 2.0

Key points

  1. YES Bank's board meets on Saturday, 17 October to approve September-quarter results.
  2. An average of six brokerages puts net profit at about ₹969 crore, up 48%.
  3. Investors want to know how the bank will deal with the ₹8,415 crore AT-1 ruling.

YES Bank’s board meets in Mumbai on Saturday to approve its results for the July-September quarter, the first set of numbers since the Supreme Court upheld an order reviving ₹8,415 crore of the bank’s AT-1 bonds that it had written off in 2020.

The bank has not said when it will release the figures. In the previous two quarters it reported between 1:30 pm and 2 pm.

What analysts expect

On the operating numbers, brokerages expect a strong quarter. An average of six brokerage estimates puts net profit at about ₹969 crore, up 48% from ₹655 crore a year earlier, and net interest income at about ₹2,807 crore, up 22%.

ICICI Securities is the most optimistic, forecasting profit of ₹1,074 crore, up 64%. JM Financial expects ₹899.5 crore, a 37.4% rise from a year ago but 16% lower than the June quarter, with the net interest margin at about 2.7%.

The bank’s provisional figures, released earlier this month, showed loans up 23.8% from a year earlier at ₹3,09,675 crore and deposits up 19.5% at ₹3,54,084 crore. The share of low-cost current and savings account deposits fell to 30% from 33.7%.

The AT-1 question

The court ruling hangs over the results. At their lowest, the bank’s shares had lost nearly a fifth of their value in the two trading sessions after the verdict. Investors will look for any word from the management on how the bank plans to account for the bonds and what the ruling does to its capital position.

YES Bank will not be alone on Saturday. HDFC Bank, ICICI Bank and Axis Bank are also due to report, making it one of the busiest days of the results season for the banking sector.