Yes Bank Posts Second Straight Year Of Profitability

Private banker Yes Bank posted a healthy performance for the quarter January-March 2023. Its profits for Q4FY23 stood at Rs 202 crore despite accelerated provisioning, three times higher than that of the previous quarter Q3FY23. It is a second straight year the company has registered a full-year profitability.

The net interest income (NII) of the bank came in at Rs 2,105 crore, an increase of 15.7% year-on-year (YoY) and 6.8% quarter-on-quarter (QoQ). FY23 NII at Rs 7,918 crore up 21.8% YoY, in line with the estimated numbers. The net interest margin (NIM) expanded for Q4FY23 at 2.8%, up 30 basis points (bps) on YoY and QoQ. FY23 NIM was at 2.6%, up 30 bps YoY and QoQ.

Commenting on the results and financial performance, Prashant Kumar, MD and CEO of Yes Bank said, "Over the last three years, the Bank has significantly progressed on several strategic objectives such as strengthening of governance and Compliance Standards, bolstering the Balance Sheet through granularity, addressing the asset quality concerns, building up a strong liability franchise and expanding the customer base", given in a press release filed in securities exchange.

Q4FY23 net profit stood at Rs 202 crore, lower by 44.9% YoY, but three times higher QoQ. Net profit for FY23 at Rs 717 crore, lower by 32.7%, led by accelerated provisioning.

The bank witnessed a strong growth in deposits and advances. Current account savings account (CASA) ratio rose by 90 bps or 30.8% QoQ while average CASA deposits for FY23 went up 26.3% YoY, aided by 30.4% YoY growth in average current account deposits.

Kumar said, "At the same time, with continuous focus on retail, we have continued to expand our footprints with new Branches, increased the employee headcount and stepped-up our investments in technology. Our Retail franchise has now reached a critical scale and is poised for profitable growth."

Total 13.4 CASA lakh accounts were opened during the year from last year's 11.4 lakh accounts and disbursed nearly 1 lakh crore loans in FY23.

Total advances grew at 13.2% YoY (excluding ARC transaction and reverse repo). Retail advances were up 38.6% YoY, SME was up 22.3% YoY and Mid Corp segment scaled up 35.8% YoY. Operating profit for Q4FY23 stood at Rs 889 crore, up 14.8% YoY for the full year. It grew by 9.2% at Rs 3,183 crore over previous year.

"With the current momentum of accelerated growth, the efficiency gains and operating leverage will naturally drive the Bank's profitability upwards. In addition to this, in order to further accelerate the profitability expansion, the Bank will be making strategic interventions in the form of calibrated yield enhancement, higher focus on growth in current account and improvement in cross-sell / fee growth on the expanded customer base." Kumar further added.

In the non-performing asset space, gross non-performing assets (GNPA) ratio came in at 2.2% vs. 13.9% last year and 2.0% last quarter. The bank's net non-performing assets (NNPA) was at 0.8% vs. 4.5% in FY22 and 1% last quarter.

About recoveries Kumar mentioned that,"moreover, the significant recoveries and upgrades during the year and particularly Q4 have been utilized for accelerated provisioning to step-up PCR and normalize credit costs over the near term."

The total recoveries and upgrades for FY23 continued to remain strong at Rs 6,120 crore, well ahead of guidance of Rs 5,000 crore. Organic accretion in Capital has grown during the quarter - CET 1 at 13.3% vs 13.0% in Q3; CRAR at 17.9% and RWA to total assets at 69.1% vs. 72.8% in FY22 and 70.9% last quarter.

The current marke price of Yes Bank stock closed at Rs 16.22 per share, down by 1.88%, on intraday basis. Its 52-week high is at Rs 24.75 per share and 52-week low is at Rs 12.26 per share. Within a year's time the share price has rallied by 14.22%, while in three years it has fallen steeply by 42.69%.