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Synopsis : YES Bank reported strong YoY growth in deposits and advances in Q2 FY25, with deposits up by 18.3% and advances growing by 13.1%. The bank's CASA ratio improved to 32%, indicating a healthier deposit mix. Despite the positive financial performance, the bank's stock price fell by 1.65%, reflecting a decline in its liquidity coverage ratio and broader market weakness. Analysts expect the bank’s operating metrics to continue improving as it focuses on PSL origination and reduces reliance on RIDF investments.
YES Bank's Q2 FY25 business update reflects growth in both deposits and advances but saw its stock price drop due to weaker market sentiment and a decrease in liquidity coverage. Deposits for the September 2024 quarter surged by 18.3% year-on-year (YoY) to Rs2,77,173 crore, with a sequential growth of 4.6% compared to Q1. Advances also increased by 13.1% YoY, reaching Rs2,36,512 crore. However, this represents a slight deceleration from the 14.8% YoY growth rate seen in the previous quarter.
The lender's CASA (Current Account Savings Account) ratio improved, coming in at 32% compared to 29.4% in the same period last year, indicating a healthier deposit mix. The liquidity coverage ratio, however, declined from 137.8% in the June quarter to 131.9%, signaling a potential decrease in liquidity availability for short-term obligations.
Despite these positive operational indicators, YES Bank's stock fell by 1.65%, trading at Rs22.05 on the BSE. The broader market weakness contributed to the decline, although analysts noted that the bank's operational parameters are on a gradual recovery track. The bank's efforts in organic priority sector lending (PSL) origination are expected to ease the pressure from Rural Infrastructure Development Fund (RIDF) investments, improving its yields and return on assets (RoA) over time.
Disclaimer: This article is for informational purposes only. Please consult a financial advisor before making any investment decisions.
