Will Yes Bank shine in last quarter of FY17?

Rana Kapoor's Yes Bank will be releasing its fourth quarter ended March 31, 2017 result later on Wednesday.

Movement in Yes Bank stocks has been very sluggish since the start of early trade. At 1103 hours, shares of the bank were trading flat at Rs 1,606.45 per piece on BSE.

Investors will closely watch the performance of Yes Bank in Q4 and would hope it would shine once again just like its previous three quarters of FY17.

In the previous three quarters of FY17, Yes Bank has managed to report above 30% growth in both bottom-line (profit after tax) and top-line (net interest income).

Q3FY17:

Till Q3FY17, Yes Bank stands with a net profit of Rs 882.60 crore, witnessing growth of 30.6% against Rs 675.74 crore during the same period last year.

Yes Bank's Gross Non Performing Advances (GNPA) at 0.85% (Rs 1005.9 Crores) compared to 0.83% in Q2FY17 and 0.79% in Q1FY17.  Net Non Performing Advances stable at (NNPA) at 0.29% (Rs 342.4 Crores) as at Q3FY17.

During Q3 Rana Kapoor Managing Director & CEO, YES BANK said, “YES BANK has delivered another quarter of satisfactory performance across key financial parameters of Growth and Profitability driven by expansion in NIMs to 3.5%, while maintaining healthy Asset Quality. During the quarter, the Bank further augmented its Digital offerings and partnerships in line with the Government of India’s push towards a Less-Cash economy."

What can be stored in Q4FY17 for Yes Bank?

Nilesh Parikh, Kunal Shah and Prakhar Agarwal analsyst at Edelweiss Financial Services said, "Loan growth to be higher than industry, retail segment off-take to gain tranction. Impairment ratio will likely be contained. Fee income trends to be in-line with loan growth."

Analysts at Motilal Oswal said, "We expect loan growth to be significantly ahead of system average at 25% YoY (nearly 5x industry growth rate) on the back of refinancing opportunities and strong growth in retail banking."

Net Interest Income (NII) is also expected to report healthy growth 28% on YoY basis. Motilal said, "Such performance of NII would be one of the best among peers."

Moreover, Non-interest income growth is likely to be around 23% YoY, on the back of strong growth from third-party distribution, continued momentum in financial advisory and higher trading gains, " stated Motilal. 

Apart from this, Motilal believes Yes Bank's Net Interest Margin (NIM)  to remain largely stable with falling yields negated by lower cost of funds on account of CASA inflows post demonetization and re-pricing of bulk deposits. However, due to aggressive franchise expansion, operating expense growth will remain higher by 33% on YoY basis. 

As for asset quality, Motilal said, "The performance has been ignificantly better than industry; we expect this trend to continue."

This Q4, investors will expect from Yes Bank on implementation of retail strategy on assets and liabilities sides, performance on asset quality and quantum of loans rescheduled under 5:25 scheme/sale to ARCs.

Hence, Motilal projects Yes Bank to report net profit of Rs 917.7 crore growing by 30.70% yoy and 3.97% qoq. While for the entire FY17, net profit is expected to grow by 31.27% yoy to Rs 3,333.6 crore. 

Also NII is expected to be at Rs 2576.2 crore increasing by 28% yoy and  2.81% qoq. In FY17, overall NII is seen at Rs 9633.2 crore rising by 32.34% yoy.