YES Bank shares dropped during Thursday’s session following the release of its Q2 business update. Despite the bank reporting an 18.3% year-on-year (YoY) increase in deposits to ₹2,77,173 crore from ₹2,34,360 crore in the corresponding quarter of the previous year, its stock declined by 1.65%, closing at ₹22.05. The sequential growth in deposits stood at 4.6%.
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For the September quarter, YES Bank reported loans and advances at ₹2,36,512 crore, marking a 13.1% YoY increase compared to ₹2,09,106 crore in the same quarter last year. However, this growth rate was lower than the 14.8% YoY growth in advances recorded in the June quarter. Sequentially, advances increased by 3% over ₹2,29,565 crore reported in the June quarter.
The CASA ratio stood at 32% for the September quarter, up from 30.8% in June and 29.4% in the year-ago period. However, the liquidity coverage ratio (LCR) fell to 131.9%, compared to 137.8% in June and 120.9% in the same quarter last year.
For the June quarter, YES Bank saw a decline in both operating expenses (opex) and credit costs on a quarter-on-quarter (QoQ) basis, but return on assets (RoA) remained flat due to lower other income, including mark-to-market (MTM) losses. The bank’s Common Equity Tier 1 (CET 1) ratio stood at 13.3% following the conversion of warrants.
ICICI Securities, in its post-Q1 analysis, mentioned that the bank’s increased focus on organic Priority Sector Lending (PSL) origination should help reduce the incremental RIDF burden, subsequently improving yields and RoAs.
