In a significant turn of events this Wednesday, India's Yes Bank (NS: YESB ) shares saw a near-2% rise following the announcement of its Q2 financial results. The bank reported a 17.2% growth in deposits and a 9.5% YoY & 5.2% QoQ increase in advances to ₹2.10 lakh crore.
In addition to the growth in deposits and advances, Yes Bank's net profit rose by 10.26% YoY to ₹342.5 crore (INR100 crore = approx. USD12 million) for the first quarter of the year. This improvement in net profit can be attributed to several factors including enhancements in the bank's asset quality, gross non-performing assets (GNPAs), net non-performing assets (NNPA), net interest margin (NIM), and non-interest income (NII).
According to InvestingPro metrics, Yes Bank's net income is expected to grow this year. The bank has been a prominent player in the Banks industry, despite its price having performed poorly over the last decade. The bank's valuation implies a poor free cash flow yield, suggesting low earnings quality with free cash flow trailing net income.
Moreover, the bank has seen positive changes in gross slippages, which is indicative of an improved credit risk profile. The CASA ratio, a key indicator of a bank’s financial health, also saw an uptick along with an increase in retail and small business deposits.
In terms of market performance, Yes Bank's stock has outperformed the benchmark Bank Nifty index over the last six months. This positive trajectory reflects investor confidence in the bank's operational and financial strategies, as well as its ability to maintain growth amidst challenging market conditions.
InvestingPro Tips indicate that despite the bank's recent performance, it has been quickly burning through cash, and revenue growth has been slowing down recently. For more tips on Yes Bank and other companies, consider subscribing to InvestingPro's premium service here.
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