YES Bank hits new high; rallies 15% in 9-days on SEBI nod to launch MF biz

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Shares of YES Bank hit a new high of Rs 386 per share, rising 2% on the BSE, and moving higher for the ninth straight trading session after the bank said that it has received approval from capital markets regulator SEBI to start mutual fund business. The stock surpassed its previous high of Rs 385 recorded on July 12, 2018 in intra-day trade.

“This approval is subsequent to the Reserve Bank of India’s (RBI) approval granted to Yes Bank to sponsor a mutual fund followed by SEBI’s in-principle approval received subsequently,” the bank said in a statement on July 4, 2018.

In past nine trading sessions, YES Bank has rallied 15% as compared to 2% rise in the S&P BSE Sensex.

Meanwhile, Motilal Oswal Securities expect YES Bank’s loan growth to be significantly ahead of the system at 57% YoY on the back of refinancing opportunities and strong growth in retail banking.

"We expect NIM to remain stable, pressure on yields to be offset by lower cost of funds on account of CASA inflows and re-pricing of bulk deposits. Consequently, NII growth is expected to be healthy at 29% YoY, one of the best among peers," the brokerage firm said in June quarter results preview.

“We expect loan growth to remain strong at around 50% yoy led by corporate loans (mostly led by refinancing). However, key monitorable would be revenue growth as we expect NIM to remain under pressure given the change in loan mix (higher share of refinanced loans). Asset quality is likely to be stable qoq. Large contribution from fee income relating to corporate loans may raise questions on the quality of new loans,” Kotak Institutional Equities said in results preview.

YES Bank is scheduled to announce its April-June 2018 (Q1FY19) results on Thursday, July 26, 2018.

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