At this stage, when the economy is in bad shape, the government may not want any bank to go bust. The banking business can be complex, and many institutions have dozens of revenue streams that contribute to their overall success or failure.

Investors who intend to hold the shares for over three years should subscribe to the issue. Despite high valuation, analysts believe that the issue is going to be fully subscribed as traders, who sold shares they did not own — called short-selling — a few days ago to bet on the fall in the stock price before the FPO, are likely to subscribe aggressively to the issue. Here click on the “Settings” tab of the Notification option. Stock Advisor launched in February of 2002. Think of it this way -- banks rely on consumers being willing to spend and borrow money to profit. And as we'll discuss in the next section, more consumers tend to run into trouble paying their debts during recessions, which can result in loan losses for banks. Investors who intend to hold the shares for over three years should subscribe to the issue. For example, online banks have a better cost structure than branch-based banks, so they can offer customers higher rates on deposits and lower rates and fees on loans. Just to name a couple of the most important: Few industries are more heavily regulated than banking, and that's especially true after the 2008-2009 financial crisis threatened to collapse the U.S. banking industry.

If consumers and businesses are unable (or unwilling) to repay their debts, it can result in losses for the banking institutions that lend money.

“The FPO, at Rs 12-13 per share, is priced at less than 1-time post-infusion FY20 book value and a 45% discount to the current market price...given the current economic situation the issue is aptly priced,” said Nirmal Bang. Let's conquer your financial goals together...faster. Shares in Yes Bank, were seeing tremendous momentum in trade today rallying 6 per cent over Tuesday's close and almost 10 per cent from the intra-day lows. This may even make a bank like State Bank of India, a potential buyer for the bank. Bank of America's net interest yield certainly fell, but only by 17 basis points, from 2.52% to 2.35%. Yes Bank is not a small bank and is a relatively large-sized bank that cannot be allowed to fail. "Our concern for Yes Bank is fresh formation of bad loans that would keep provision highs and return ratio compressed for longer time. Watch-out for a buyout or capital infusion, the two biggest triggers for the stock. Do you want to clear all the notifications from your inbox? YES Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills which contributed Rs 22922.64 Crore to Sales Value (77.37 % of Total Sales), Income From Investment which contributed Rs 6048.42 Crore to Sales Value (20.41 % of Total Sales) and … One of the worst-performing sectors in the market during the COVID-19 pandemic has been the financials, down by 22% in 2020 through September compared to a 5% gain in the S&P 500. In recessions, fewer people tend to buy cars and houses or use their credit cards. At around the Rs 38 to Rs 40 levels, many investors maybe willing to take a risk.

Worth mentioning here is that there is no restriction on selling of FPO shares in the secondary market. In the current market, other banks are trading at an attractive valuation of FY20 net worth — IDFC Bank (0.9 times), SBI (0.5 times core banking business), Federal Bank (0.9 times),” Angel Broking said in a note. YES Bank Ltd., incorporated in the year 2003, is a banking company (having a market cap of Rs 31694.46 Crore).

I'd be willing to guess that they'll be volatile as the economic effects of the COVID-19 pandemic and recession play out, but that's it. From the end of 2018 to the end of 2019, the federal funds rate (the benchmark interest rate the Federal Reserve controls) declined by 75 basis points, or three-fourths of a percentage point.
The shares of the bank were last seen trading at Rs 40.40.
The three most prevalent risks banks face are cyclicality, loan losses, and interest rate risk. “The smarter traders or investors have already done the reverse deal by selling Yes Bank in the last few days to buy it back in the FPO,” the ET report quoted Baliga as saying. Having said that, if you focus on quality banks that have a strong history of managing risks and generating profits, banks can be excellent means of investing for the long term. Yes Bank Gives Q2 Performance Update; Shares Rise, Yes Bank To Sell Its Mutual Fund Business, Yes Bank Surges Over 2%, CG Power Locked In 5% Upper Circuit After Bank Sells Stake In The Latter, Yes Bank Hits 5% Upper Circuit On Repaying Rs 35,000 Crore To RBI, LIC Acquires Close To 5% Stake In Yes Bank, Yes Bank Shares Jump 3.5% On Moody's Upgrade, Yes Bank Q1 Net Profit Falls 60% to Rs 45 Crore, Yes Bank Hits Lower Circuit On Excess Share Supply And No Buyers, This Foreign Bank’s Fixed Deposit Interest Rates Are Better, Pension Products With Guaranteed Return To Be Soon Made Available: PFRDA, Amber Enterprises, Voltas, Blue Star Gain After Govt Bans AC Imports. The one good thing for the bank is the strong brand equity and there would be many banks that may want to still consider a takeover. Banks are a rather cyclical business, meaning they are sensitive to recessions. Analysts say Yes Bank FPO is aptly priced at the price band of Rs 12-13 as the scope of recovery in the bank's asset quality and earnings in the near term looks difficult because of the Covid outbreak. Pricing of Yes Bank FPO may look attractive as it gives immediate arbitrage opportunity. His calling for 9000 on nifty.


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