New Delhi: is likely to report a 25-30% growth in net interest income (NII) for the September quarter although analysts are mixed over the private lender’s bottomline projections.

The private sector lender posted an 11.6% year-on-year (YoY) growth in the loans and advances to Rs 1.92 lakh crore in Q2FY23. The lender’s deposits stood at Rs 2 lakh crore as on September 30, up 13.2% YoY.

Nuvama Institutional Equities expects a 19.3% improvement on a YoY basis in the CASA ratio, with a net interest income (NII) at Rs 1,890 crore, up 25.2% YoY. NIMs are likely to improve by 20 basis points to 2.4%.

The brokerage firm is expecting a profit-after-tax (PAT) of Rs 300 crore, up 32.6% on a yearly basis, whereas pre-provisioning operating profit (PPOP) is pegged at Rs 580 crore, registering a 14.7% decline.

Despite expectations of decent performance in the September 2022 quarter, Nuvama has a reduced rating on the lender with a target price of Rs 12.

The bank has been reporting lower-than-expected slippages in recent quarters, said the brokerage firm but added that provisions could be higher on a quarter-on-quarter (QoQ) basis led by ageing provisions.

Kotak Institutional Equities (KIE) expects the lender’s NII to grow about 30% YoY. Business momentum is gaining traction across retail and MSME segments but overall loan growth could be lower than the industry average at 12% YoY.

“We expect NIM at 2.5% on a sequential basis. Revenue growth pressure remains high especially led by weak treasury income. Forecasting slippages and recovery trends would be a challenge given the nature of the slippages.”

KIE expects Yes Bank to report a net loss of Rs 115.5 crore as against a net profit on both a YoY and QoQ basis. It has a sell rating on the stock with a target price of Rs 14.

Analysts from Dalal Street would be monitoring the progress of asset reconstruction company (ARC) which would be the vehicle that the bank would use to clear out its outstanding stock of non-performing loans (NPLs).

Nirmal Institutional Equities is expecting the lender to report NII at Rs 1,935.4 crore, about 29% higher YoY. Pre-provisioning operating profit is likely to be around Rs 669.3 crore, down 1.3%.

It sees the bottomline at Rs 313.7 crore, up 39.1% YoY. The brokerage is seeing NIMs at 2.8%, 36 bps higher than the previous year.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)


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