YES Bank Q1 PAT up 10% on growth in other income, retail loans

Yes bank It posted a 10.3 per cent year-on-year increase in its net profit for the first quarter of FY24 at Rs. 343 crore, largely driven by strong growth in non-interest income and retail loans. Sequentially, profit after tax was 69 percent higher.

Other income increased by 54 per cent YoY and 14 per cent QoQ at Rs 1,141 crore, driven by third party sales, trade fees and remittances.

Net Interest Income (NII) increased by 8.1 per cent YoY at ₹2,000 crore. Net interest margin for the quarter was 2.5%, up 10 basis points year-over-year.

on the earnings call, Managing Director and CEO Prashant Kumar He said he expects NIM pressure to continue in the second quarter due to deposit repricing but is settling in.

Progressing

Net advances increased by 7.4 percent on a yearly basis at ₹ 2 lakh crores. Advances from the bank grew 10 per cent year-on-year after adjusting for sale to asset rebuilding companies (ARCs). This increase was led by a growth of 31% in retail advances, 24% in SME loans and 29% in medium business loans.

Kumar said large corporate loans contracted at 29 percent year-on-year and 9 percent quarter-on-quarter, largely due to higher-than-expected repayments of Rs 3,000 crore, excluding portfolio growth of 15 percent year-on-year.

Price mismatches amid intense competition have also slowed growth in large firms. However, the non-fund book grew 12 percent year-over-year and 4 percent quarter-over-quarter, and the bank will look to grow fund-based and non-fund portfolios going forward.

Yes bank The bank is looking forward to loan growth of between 15 and 20 percent for FY24, as the bank expects moderating growth in the corporate book and growth of 25 to 30 percent in the retail, SME and mid-corporate sectors.

Retail payments for the quarter were at ₹12,000 crores, SME at ₹6,700 crores, medium enterprises at ₹1,300 crores, and payments for large firms at ₹4,700 crores, Kumar said.

Asset quality

Slips for the quarter were ₹1,430 crores, higher than both ₹1,196 crores a quarter ago and ₹1,072 crores a year earlier.

Net of recoveries and upgrades, slips were Rs 764 crore, in line with Rs 740 crore in the last quarter, Kumar said, adding that slips were high due to one large real estate SMA-2 account of Rs 400 crore that went bad during the quarter. The slippage rate for the year has been fixed at 2-2.5 per cent.

He added that overall resolution momentum remains strong, with the bank seeing redemptions and promotions of Rs. 1,201 crore in the first quarter of which Rs. 425-450 crore is against Safety Receipts (SRs).

YES Bank is aiming for total recoveries of ₹5,000 crore in FY24, of which more than ₹2,000 crore is seen coming from SRs. The bank had a total book in Saudi Riyals of Rs. 2,600 crore at the end of June, with a face value of more than Rs. 5,200 crore.

The bank’s overall NPA ratio improved significantly to 2 percent as of June 30 from 13.4 percent a year ago and slightly better than 2.2 percent last quarter. The net NPA rate was 2.4 percent, flat from the prior quarter.

Bank deposits rose 13.5 per cent year on year to Rs 2.2 crore led by 23 per cent growth in retail deposits even as high cost corporate deposits slowed as a strategy. The bank also witnessed a successive decline in current account and savings account deposits, which Kumar attributed to a drop in high-value savings deposits and customers’ preference for higher-yielding fixed deposits. The CASA ratio was at 29.4 percent on June 30, down from 30.8 percent in the year-ago quarter.