YES Bank Shares Extend Winning Streak for Fourth Consecutive Day, Surge 9%

Following a significant development, YES Bank’s stock surged by 9.25% to reach a high of Rs 32.81 on the BSE. This marks the fourth consecutive day of gains for YES Bank’s stock.

Shares of YES Bank Ltd surged by 9% in Friday’s trade following the bank’s denial of reports indicating that stakeholder State Bank of India (SBI) was planning to sell a stake worth Rs 5,000-7,000 crore in the private lender via block deals. YES Bank clarified that the news was speculative in nature, which it had communicated to the stock exchanges on Thursday.

Following the development, YES Bank’s stock surged by 9.25% to reach a high of Rs 32.81 on the BSE. On the NSE, a total of 62,84,43,825 YES Bank shares were traded, with the turnover on the counter soaring to Rs 1,977 crore within the first 30 minutes of trade.

As the trading session progressed, the stock pared some gains and was up 2.43% at Rs 30.76 level. Nonetheless, this marked the fourth consecutive day of gains for YES Bank. The stock had settled 0.67% higher on Thursday, surged by 17.32% on Wednesday, and rose by 11.40% on Tuesday.

Yes Bank stated, ‘The bank is not involved in any negotiations with respect to the subject of the news. Hence, the Bank is unable to comment on the said article and its impact. Further, we would like to clarify that presently, there are no material events which are required to be disclosed under Regulation 30 of the Listing Regulations.

“Yes, we shall keep the stock exchanges informed of any material events as required under Regulation 30 of Listing Regulations,” stated YES Bank. SBI also deemed the report factually incorrect.

Yes Bank recently reported a Q3 profit of Rs 231 crore. However, Emkay Global noted that this figure was lower than expected, attributing it to elevated loan loss provisions (LLP). Additionally, the bank reduced its specific provision coverage ratio to a low of 57%.

Yes Bank’s overall credit growth trajectory remains sub-optimal at 12% year-on-year. The bank has become cautious regarding unsecured lending due to increasing concerns over asset quality. Additionally, overall stressed assets, including NNPA, SR, and RSA, are reported to be high.

“3.3% of loans, coupled with potential fresh stress from the retail book, could keep provisions elevated and depress RoAs. In light of the adverse Bombay High Court judgment in the AT1 write-off case, RBI and Yes Bank’s appeal is up for hearing in the Supreme Court,” Emkay Global stated following YES Bank’s December quarter results on January 29.

The YES Bank management believes that even in the event of an unfavorable judgment, it will not have a significant financial impact. Considering the slower growth and higher provisions, Emkay has reduced its FY24-26 earnings estimates by 13-33%. They expect the bank to deliver sub-par Return on Assets (RoA) of 0.4-0.6%. Emkay has retained its SELL recommendation on the stock with a target of Rs 12 per share.

Read more Business News