Investors upbeat on Yes Bank earnings

Yes Bank Ltd shares rallied 11% on Friday after its December quarter earnings were announced in what could almost be termed a relief rally.

After a clutch of peers such as ICICI Bank Ltd and Axis Bank Ltd reported a jump in bad loans following a central bank review, Yes Bank’s asset quality numbers seem sterling even in absolute terms, leave alone relatively to others.

Yes Bank’s gross bad loans amount to Rs.559 crore, or 0.66% of its loan book. That’s peanuts in comparison with the 4.7% gross bad loan ratio for ICICI Bank and even 1.7% for Axis Bank. Even if one includes restructured assets, which amount to another 0.67% for Yes Bank, the overall stressed assets are much lower.

In the December quarter, Yes Bank further reported that there were no slippages, or fresh loans turning bad, from its restructured book.

It has also refrained from classifying stressed accounts as standard under the 5/25 scheme, which allows banks to refinance loans to infrastructure projects over a longer duration, or strategic debt restructuring, which allows banks to convert debt into equity.

Yes Bank