Yes Bank predicts improvement in net interest margin over next three years
Yes Bank, a leading private sector bank, expects a steady improvement in its business performance over the next three years. The bank’s management believes that its net interest margin (NIM) could improve up to 100 basis points or 1% in the next three years. The bank’s CEO and MD, Prashant Kumar, stated that the focus would be on increasing low-cost deposits and offering more loans to high-yield clients to achieve this goal. The bank’s shares saw a significant rise today, reaching a high of 17.18 INR on the BSE, a gain of over 6%. However, it closed at 16.73 INR with a 3.59% increase.
CEO outlines Yes Bank’s plan for growth
According to Kumar, the bank’s net interest margin was at 2.8% in the March quarter, which has now increased by 30 basis points to 3.0%. In comparison, other private sector banks such as ICICI Bank and HDFC Bank have a net interest margin of over 4%. To support higher income growth, the bank will focus on clients who offer high margins but have lower risk. The bank aims to achieve a credit growth of 15-20% by 2023-24. Additionally, to increase profits, the bank plans to reduce loan-loss provisions. It is also looking to improve the ratio of current and savings account (CASA) deposits, which currently account for 30.8% of its total deposits.
Shares have risen by over 11% this fiscal year
The bank has performed well this fiscal year, with its shares rising by over 11%. Today, the shares saw a rise of over 6%. Last year, the bank’s shares reached a low of 12.26 INR and a high of 24.75 INR. Currently, the shares are trading at 16.73 INR, which is a 36% increase from the low and a 32% discount from the high. The bank hopes to continue to deliver strong returns to its shareholders in the coming years.
In conclusion, Yes Bank is optimistic about its future growth prospects. The bank plans to focus on increasing its net interest margin, reducing loan-loss provisions, and improving the CASA deposit ratio to achieve its goals. Investors are hopeful that the bank will deliver strong returns in the coming years.
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