Explained: Why asset quality is a never-ending issue at YES Bank

With elevated credit cost guidance and addition to stressed assets, share under pressure; faster than anticipated capital infusion seems critical

The problem with YES Bank, analysts say, is that it hasn’t met its asset quality forecasts (‘guidance’) even once in the past three quarters. “Of course, the operating environment is unpredictable, but if the bank can’t give us a clear picture of what’s in store, calling the bottoming out of its asset quality stress is nearly impossible,” says one with a foreign brokerage. 

Operationally, the September quarter (Q2) was far from comfortable, with net interest income falling 9.6 per cent year-on-year (yoy) and profit before tax more than halving to Rs 122 crore, thanks to a 42 per cent yoy increase