1 day ago
Goldman Sachs Keeps Sell Rating on YES Bank After Q2
Goldman Sachs kept its Sell rating on YES Bank after looking at the bank's latest business update.
The bank received Rs 18,700 crore in FCNR-B deposits.
Most of that money was funded by foreign currency term loans.
Loans grew faster when these deposits were included.
Goldman Sachs said normalized loan growth slowed compared with the previous quarter.
Deposits also grew, helped by certificates of deposit and term deposits.
Investors are expected to watch the bank's margins, fee income, and loan recoveries.
YES Bank shares rose 1.8% during the morning trading update, but the consensus price target was nearly the same as the share price.
Goldman Sachs retained its Sell rating on YES Bank after reviewing its Q2 business update.
The bank received Rs 18,700 crore in FCNR-B deposits, 81% of which was funded by foreign currency term loans.
Including those deposits, loans grew 23.8% year over year and 8.6% quarter over quarter, above Goldman Sachs' estimates.
Normalized deposit growth was 13.2% year over year, while deposits including FCNR-B rose 19.5% year over year and 12.3% quarter over quarter.
YES Bank shares were up 1.8% at Rs 21.08 at 10:40 a.m.; the 12-month Bloomberg consensus target was Rs 21.09.
- Who
- YES Bank and Goldman Sachs.
- What
- Goldman Sachs retained its Sell rating after reviewing YES Bank's Q2 business update.
- Where
- The report concerns YES Bank shares; the article does not specify a trading venue.
- When
- After the Q2 business update; shares were quoted at 10:40 a.m.
- Why
- Goldman Sachs said investors will focus on normalized margin and fee income trends, proposed insurance regulations, and the pace of recoveries from the legacy book.
Key facts
- FCNR-B deposits received
- Rs 18,700 crore
- FCNR-B funding
- 81% was funded by foreign currency term loans
- Loan growth including FCNR-B
- 23.8% year over year and 8.6% quarter over quarter
- Normalized loan growth
- 17.7% year over year, compared with 18.3% last quarter
- Normalized deposit growth
- 13.2% year over year, down from 14.3% last quarter
- Share price
- Rs 21.08, up 1.8% at 10:40 a.m.
- 12-month Bloomberg consensus target
- Rs 21.09
Quotes
Goldman Sachs
Investment bank commenting on YES Bank’s Q2 business update.
“Sequentially, growth was strong at +6.5 per cent (vs. decline of 1 per cent last quarter), led by a sharp increase in certificate of deposits (Rs 11,400 crore vs. Rs 6,600 crore) and healthy term deposit growth (+5.9 per cent QoQ), while CASA deposits grew by +3 per cent QoQ. Including FCNR-B, deposits grew by +19.5 per cent YoY / +12.3 per cent QoQ vs. our estimate of +15 per cent YoY / +8 per cent QoQ.”
businesstoday.in
Sources
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