YES Bank Q4: Lender logs Rs 367 cr as net profit, NII rises 84% YoY

YES Bank reported a net profit of Rs 367 crore in the January-March quarter compared to a loss of Rs 3,787.75 crore in the year-ago period, citing a fall in provisions for the recovery. Analysts at Bloomberg had estimated a loss of Rs 254 crore for the quarter.

Sequentially, net profit is up 38 per cent. Also the private bank in FY22 earned net profit to the tune of Rs 1,066 crore, the first full year of profit since FY19.

Net interest income (NII) increased by 84 per cent year-on-year (YoY) and 3.1 per cent sequentially to Rs 1,819 crore. Non-interest income has grown by 28 per cent YoY and 20 per cent sequentially to Rs 882 crore. Non-interest margin (NIM) of the lender stood at 2.5 per cent in Q4FY22.

Provisions fell significantly to Rs 271 crore in Q4FY22 compared to Rs 5,113 crore in the year-ago period. In the previous quarter, the bank had provided Rs 375 crore.

Asset quality improved, with gross non-performing assets (NPAs) at 13.9 per cent in Q4FY22, down 8 basis points sequentially. Net NPAs also improved by 8 basis points to 4.5 per cent. The provision coverage ratio of the bank improved to 81.5 per cent.

Resolution momentum continues to be strong as far as recoveries is concerned, with total recoveries and upgrades of the bank for FY22 at Rs 7,290 crore versus Rs 5,782 in FY21; Q4FY22 cash recoveries and upgrades was at Rs 1,828 crore for the bank. “We are targeting recoveries and upgrades of Rs 5,000 crore for the third year in a row”, said Prashant Kumar, MD&CEO, YES Bank.

Advances of the lender increased by 8 per cent YoY and 3 per cent sequentially to Rs 1.81 trillion. It has seen disbursement of nearly Rs 70,000 crore in FY22. The gross retail disbursement for the quarter was Rs 10,201. Around Rs 857 crore was disbursed in the quarter under the rural segment and SME disbursement for the quarter was Rs 5,089 crore and wholesale banking saw Rs 3,776 crore.

The mix between retail and corporate has improved by 300 basis points to 60: 40, thus achieving the strategic objective one year ahead of time. Retail, SME, and medium enterprises have shown robust growth in advances of 31 per cent, 16 per cent, and 32 per cent on a YoY basis, respectively for FY22.

“The mix between retail and corporate would further improve by 400 basis points. And, the bank is targeting a total advances growth of more than 15 per cent, with 10 per cent growth in large corporate segment, and more than 25 per cent growth in retail, SME and medium enterprise segment”, Kumar said.

Deposits have seen an increase of 21 per cent YoY and 7 per cent sequentially to Rs 1.97 trillion. The bank is acquiring more than 100,000 CASA customers on a monthly basis. The growth in liabilities has come despite reduction in interest rates, which is a reflection of our superior customer service, and the stakeholder confidence, Kumar said.

The bank has a capital adequacy ratio of 17.4 per cent at the end of March, 2022. “The current capital is sufficient to take care of the growth aspirations of the bank in the current financial year (FY23). When we raised Rs 15,000 crore in our FPO in July 2020, everybody in the street was expecting that we would come back to market within 12 months”, Kumar added.

Given the current uncertain times, it is important to have some buffer capital hence the bank will look to raise capital to create the buffer in the current financial year (FY23).

The process to form the ARC and complete the transfer of stressed assets is on track and the bank expects to complete this exercise in the current quarter (Q1FY22). The process to finalize a partner is also underway.

We would offload the entire gross NPA pool to the ARC, Kumar said. The way we are moving ahead ( with ARC plans), it is in line with the regulatory requirement, Kumar added.