YES Bank Q2: Analysts see pressure in net interest margin

Private sector lender YES Bank will declare its second quarter (July-September) results today. According to a CNBC-TV18 poll, the key focus will be on net interest margin of the bank. Analysts expect pressure in margin sequentially because Reserve Bank of India increased short term rates during September quarter to curb rupee depreciation. More than 60 percent of bank's total funding is via wholesale funding.

Analysts expect 10-15 basis points Q-o-Q pressure on net interest margin, but that could be negated due to the 25 basis points hike taken in benchmark prime lending rate (BPLR) on August 1 by the bank.
Its rival IndusInd Bank's net interest margin declined 7 basis points Q-o-Q to 3.65 percent in September quarter as its 35 percent of its total funding is through wholesale funding.
Profit after tax growth of YES Bank is estimated to be lower as non interest income could be affected by mark-to-market (MTM) losses on the corporate bond book. Analysts expect profit after tax to increase 10 percent year-on-year to Rs 337 crore in the quarter gone by.
Net interest income may grow 26 percent to Rs 658 crore in September quarter from Rs 524 crore in a year ago period.
Analysts expect asset quality to be maintained during the quarter.