Yes Bank Returns to F&O Segment After Four Years: A Look at Its Journey

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Yes Bank Returns to F&O Segment After Four Years: A Look at Its Journey

Yes Bank, a prominent private-sector lender, has marked its return to the futures and options (F&O) segment after a gap of four years.

November 29th, 2024 News

Yes Bank, a prominent private-sector lender, has marked its return to the futures and options (F&O) segment after a gap of four years. The stock is currently among the 45 new entrants in the F&O space, though for Yes Bank, it signifies a re-entry rather than a debut.

Why Was Yes Bank Excluded From F&O?

Yes Bank's exclusion from the F&O segment dates back to May 2020, during a turbulent phase for the lender:

Moratorium Imposed: The Reserve Bank of India (RBI) had imposed a moratorium, restricting deposit withdrawals to ₹50,000 per account for a month.
Board Superseded: The central bank superseded the board of Yes Bank due to financial instability.
Removal from Nifty 50 Index: In March 2020, the bank was also excluded from the Nifty 50 index.
Rescue Plan: The bank was subsequently rescued by a consortium of lenders, led by State Bank of India (SBI).

Yes Bank’s Performance Over the Years

Yes Bank’s stock has seen significant volatility in recent years:

2020: Shares plummeted by 62%, reflecting the financial distress the bank was facing.
2021: Decline continued with a further 23% drop in share value.
2022: The stock staged a recovery, gaining 50% for the year.
2023: Momentum slowed, with only a modest 4% increase.
2024 (Year-to-Date): Shares are down by 11%, trading at ₹20.1 currently.

Latest Quarterly Performance (September 2024)

Despite a challenging market performance this year, Yes Bank showed improvements in its financial metrics:

Net Interest Income (NII): Grew by 11.1% year-on-year.
Net Profit: More than doubled due to lower provisioning.
Asset Quality: Remained stable compared to last year.
Deposits: Increased by 18% year-on-year, showcasing enhanced customer confidence.
Advances: Growth remained subdued at 1.1% year-on-year.

Market Reaction to F&O Re-Entry

While the re-entry to the F&O segment is a milestone, Yes Bank shares were trading 1.1% lower at ₹20.1 during Friday’s session. Market sentiment remains cautious as investors weigh the bank's turnaround story against the challenges it still faces.

Key Takeaways for Investors

F&O Re-Entry: Marks a significant development in Yes Bank’s journey towards regaining investor confidence.
Financial Stability: Improved financials indicate progress, but flat growth in advances suggests underlying challenges.
Volatile History: Yes Bank’s stock has been highly volatile, reflecting both risks and opportunities for investors.
Future Outlook: With consistent improvement in its asset quality and profitability, the bank’s long-term prospects appear more stable.

As Yes Bank embarks on this new chapter, market participants will closely monitor its financial performance and strategic initiatives. For now, the lender’s return to the F&O space signals a step forward in its recovery journey.

Disclaimer: This article is for informational purposes only. Investors should conduct their own research or consult a financial advisor before making investment decisions.