Shares in Yes Bank slumped 12 per cent in trade, following a set of results that disappointed the street. The shares of the bank hit a new 52-week low as well.
The stock has seen a roller coaster ride and had risen sharply on fund raising plans, ahead of the results. Many analysts however feel that the share may have bottomed out and the worst for the bank may now be behind. There maybe still three or four quarters of pain, before recovery in the bank earnings.
On Wednesday, Yes Bank reported a 91 percent decline in its June quarter profit to Rs 113.80 crore when compared to the same period a year ago, on the back of higher provisions. In June 2018, it posted a profit of Rs 1,260.36 crore.
The private lender's total provisions were three-times higher in the first quarter of the FY20 at Rs 1,784.1 crore when compared to Rs 625.70 crore a year ago. In March 2019 ended quarter, provisions made were Rs 3,661.70 crore. The bank's net interest margin fell to 2.8 percent as against 3.1 percent in the March quarter and 3.3 percent in June 2018.
However, in terms of value it increased to Rs 2,280.84 crore from Rs 2,219.14 crore a year ago. Gross non-performing assets rose during the quarter under review to 5.01 percent from 3.22 percent in the March quarter and 1.31 percent in the first quarter of FY19. Yes Bank said that its provision included one-off impact of Rs 1,109 crore of its investment MTM provision that were led by rating downgrades of investments in companies of two financial services groups.
The shares of Yes Bank have been extremely volatile and investors remain confused as to what levels the bank shares would bottom. However, some analysts are recommending a "buy" rating on the stock, on hopes of fund raising.