Why are ICICI Bank, Kotak Mahindra, YES Bank under stress today?

Shares of private sector banks were reeling under stress on Monday, with Kotak Mahindra Bank, YES Bank, and ICICI Bank falling up to 5% after announcing their quarterly earnings. Shares of all these three major private banks witnessed selling pressure even after they reported robust growth in their June quarter earnings released on Saturday. At 11:30 AM, the S&P BSE private bank index was down 0.6%, in line with the benchmark S&P BSE Sensex, which was down 0.8%.

Among the individual stocks, YES Bank dropped 5.5% to hit an intraday low of ₹13.90 on the BSE amid heavy volumes. The trading volumes at the counter surged to 208 lakh equity shares as compared to the two-week average volume of 174.38 lakh stocks changing hands on the BSE. In the past one month, the stock has outperformed the market by rising nearly 1.7%, against a 5.5% growth in the benchmark indices.

Shares of Kotak Mahindra Bank dropped 1.9% to touch a low of ₹1,792.25 on the BSE during the session so far. With a market capitalisation of ₹3.56 lakh crore, the largecap stock trades higher than 5-day, 20-day, 50-day, and 100-day moving averages. It has fallen 3% in the last one week, while it gained 5.5% in the past one month. The stock has given 4% returns over one year period.

Meanwhile, ICICI Bank shares swung between gains and losses in today's trade. The banking heavyweight gained as much as 2.2% to hit an intraday high of 817.85, while it dropped marginally to touch an intraday low of 797.20 during the session so far.

Among others, Bandhan Bank, AU Small Finance Bank, Axis Bank, HDFC Bank, and Federal Bank were also flashing in red, falling in the range of 0.5-4%. Bucking the trend, RBL Bank and IndusInd Bank gained up to 1% during the session so far.

How ICICI Bank, YES Bank, Kotak Mahindra Bank performed in June quarter

ICICI bank, the country's second-largest private sector lender, has registered 50% year-on-year (YoY) growth in profit at ₹6,905 crore for June quarter, driven by higher net income and sharp decline in provisions. The bank posted a profit of ₹4,616 crore in the corresponding period last year. The net interest income rose by 20.8% to ₹13,210 crore, compared to ₹10,936 crore reported in corresponding period of previous fiscal.

Similarly, Kotak Mahindra Bank posted 26% YoY growth in profit at ₹2,071.15 crore for the quarter ended June 2022, supported by fall in bad loan provisions and improvement in asset quality. The net interest income of the bank grew by 19.2% YoY to ₹4,697 crore for the quarter.

YES Bank also registered a 50% YoY rise in profit to ₹310.63 crore, boosted by a significant fall in bad loan provisions. The net interest income for the quarter surged 32% YoY to ₹1,850 crore, driven by a rise in credit growth and deposits. The bank has successfully come out of the reconstruction scheme with the formation of an alternate board, effective from July 15, 2022. Recently, the bank signed a binding term sheet with JC Flowers Asset Reconstruction (ARC) for the proposed sale of an identified stressed loan portfolio of the bank aggregating to ₹48,000 crore.