Icon times
Should I Buy or Sell or Hold Yes Bank?

Should I Buy or Sell or Hold Yes Bank

Published on 22 December 2020 .Views 127 .Comments 0
Share On

Yes Bank stock analysis - Should I Buy or Sell or Hold Yes Bank

Introduction - Yes Bank Detailed Stock Analysis

The article offers a thorough Yes Bank stock analysis, laying down the positive & the negative aspects of the bank.

YES BANK is an Indian Private bank that offers personal banking, corporate banking & internet banking services including accounts, deposits, credit cards, home loan, personal loans, etc.

Recently a report issued by Macquarie Capital, indicated that there are chances that Yes Bank can see a substantial increase in stress on asset quality in the upcoming quarters. Let us discuss the reasons behind this and some positive developments in the bank’s case in this blog.

The investors would get a clear picture of the stock after adequately analysing the bank’s pre & post covid performance. A detailed Yes Bank fundamental analysis is offered to the investors, indicating its corporate structure and fundamentals. 

Key Concerns - Yes Bank Performance Analysis

  • The Bank has large exposures to the real estate and hotel industry. These capital intensive industries have suffered badly due to the COVID-19 crisis.
  • This can result in a substantial increase in NPAs over the next two quarters.
  • Although the Bank’s management claims that they have made enough provisions towards their exposures in these two sectors, Macquarie reported that the bank could see a surge in its bad debts and the bank would require to make more provisions.
  • Currently, the bank’s tier1 common equity ratio (CET -1) is ~13.4% as on Sept’20, and it might go below 12% by Mar’21. However, management is confident that it won’t dip below 12%. 

Yes Bank Common Equity Ratio

Key Positives - Yes Bank Stock Analysis Report

1. Changes in Corporate Structure 

  •      Bank has made a clear demarcation between risk and business in its new structure. MD & CEO is now no longer a part of the credit committee. Credit Committee is a committee that overlooks the process of disbursal of loans.
  •       Also, the Bank is considering business and credit quality checks of the counterparty before underwriting loans.
  •       The head of risk and compliance would now report to the board, instead of management. Thus, the board is more actively involved in critical decision making.   

2. Improving Business Outlook - Yes Bank Performance

  •        New account openings in the bank per month have almost doubled from the pre-COVID levels and the bank is targeting new account openings to the tune of 1 lakh per month.
  • This is possible mainly as the bank is offering attractive interest rate of 6.5% on deposits which is way higher than its peers.   

Conclusion - Yes Bank Analysis

There are some signs of recovery for the bank with improving corporate governance practices and business outlook. However, it is important to look at how the NPA situation turns out in a few upcoming quarters post moratorium.

We offer many resources on Yes Bank, facilitating the users to make a viable investment decision. You can check our stock article on Yes Bank FPO Review, which offers a thorough analysis of the bank. You can check out the latest Yes Bank stock price along with its financials on the stock-o-meter feature on our website.

Make all your investment decisions with us, as we offer quality financial advice. For more of such quality content, check out Invest Yadnya.

private article suscription area icon

You like to know more. We like that!

Please subscribe Model Portfolio Plan to get access of all premium model portfolio articles Only at Rs. 9,999.00/Year.

Please login to view this free article.

This blog is available only for logged in users, please register and get access to view this article.

Recently Uploaded

premium Premium
free Free
Chat on WhatsApp
Caret UP Arrow
InvestYadnya Support
Typically replies in minutes
InvestYadnya Support
Hi there
Welcome to InvestYadnya.
We are available to assist you on WhatsApp.
Please click on the button below to chat with us.
(10 AM to 7 PM IST)
Chat with InvestYadnya