and if Yes Bank had not responded, our arguments can be in line that why Yes Bank is silent on such inaccuracies. I don’t think that Yes Bank was wrong in responding.
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Yes Bank is well within its right to engage with UBS in order to point out and correct inaccuracies in the report. No one has any objection to that. What is objectionable is directing a research house to drop coverage. Management efforts are better focused on managing the company and not in managing research houses.
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Yes Bank response
Stock fell with more than 5% with volume more than 25M in spite of good results. Are we missing any negative news?
Results appear to be fine. Why is price crashing?
- Probably the market isn’t quite happy with the continuously declining NIMs, they are at 12 qtr lows.
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NII growth is the slowest in many qtrs, at 23%.
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This qtr they have opened 5 branches which is the slowest pace in many years.
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Bond loss of Rs 278 crs will be amortised over balance of the year. If they had taken the hit this quarter, profit would have been less than Rs 1000 crs
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Is it normal for banks to spread this type of loss over the year? Or is Yes Bank doing something out of line?
rbi has permitted banks to do so. hdfc / indus / kotak did not excercise this option i.e. they took the hit upfront.
Cool. Got it! Thank you!
Just found that HDFC Bank took the hit of 391 crs upfront. So the amount of loss between the two banks is similar. Around 400 crs.
HDFC Bank’s Q1 PAT fell QoQ because of this. If we add 300 Crs to HDFC Banks Q1 PAT then the QoQ growth will be 2% (vis-a-vis 4% QoQ PAT degrowth).
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Query:
Note #8 in the result PDF says the following at the end:
“The Bank had however not availed of the said option and recognized the entire net mark to market loss on investments in the quarter ended March 31, 2018.”
Can someone please clarify what it means. Thank you!
It means the rbi dispensation was available for two quarters - March 18 and June 18. They took upfront hit for March 18 results and have chosen to amortize for June 18 results
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So can we assume this upfront losses will not be seen or rather less in coming qtr…which in turn boost the profits more?
Cool. Thank you for your quick response!
From my understanding, Yes Bank has decided to split the losses incurred in June 18 qtr into 4 equal parts. And they have recognized the 1/4 in Q1 and will recognize the rest in 3 subsequent quarters.
results are good not great…bank is still undervalued compared to other retail focused players in the market…does any one know what is the RBI audit they’re alluding to and when can we expect to see the results…
Yes Bank was one of the contenders
Rajat Mehta sold 1,48,500 shares through market sale on August 14, 2018.
Sanjay Nambiar sold 30,400 shares through market sale on August 10, 2018