Mumbai: Shares of private sector lender YES Bank touched a record high of Rs 385, riding on strong investor sentiment even as the 30-share Sensex touched an alltime high on Thursday. The shares, however, came off the highs and ended at Rs 374.8 apiece.
The Sensex touched a new record high in early trade, taking cue from an overnight drop in crude oil prices. The index touched a new high of 36,699.53 before ending at 36,548.41. YES Bank, which celebrated on Thursday its 13th anniversary of listing on stock exchanges, is part of the index.
In these 13 years, the bank has reported consistent profit growth along with robust asset quality, making it a top pick for investors. The bank will report its first quarter results on July 26.
In the last quarter ended March 2018, YES Bank reported a 29 per cent rise in net profit led by a 54 per cent growth in loan demand from companies as well as individuals. Net profit increased to Rs 1,179 crore, or Rs 5.06 per share, from Rs 914 crore, or Rs 4.21 per share, reported a year earlier.
Also, the gross NPAs of the bank are among the lowest in the industry. The banks gross NPAs stood at 1.28 per cent of its total loans, or Rs 2,627 crore, down from 1.52 per cent a year ago and 1.72 per cent in the quarter ended December 2017.
Last week, Care Ratings upgraded YES Banks credit rating to the highest AAA from AA+ for infra bonds and tier-II bonds.
US-based brokerage Jefferies said the banks incremental borrowing costs will decline by about 30-40 basis points after the upgrade, allowing the bank to compete on better terms and possibly improve its net interest margin (NIM).
“The funding profile has shifted towards wholesale financing – aggressive asset expansion, cheaper refinancing opportunities, opportunistic Tier-II & AT1 placements. A combination of the above factors led to 25 bps decline in NIM in second half of fiscal 2018 vs first half of fiscal 2018,” the brokerage said.