YES Bank's Q4 net declines 45% to Rs 202.4 cr on higher provisions

Doubling of provisions led private sector lender Yes Bank on Saturday to post a 45 per cent decline in its March quarter net at Rs 202 crore.

For the entire fiscal FY23, the bank witnessed a 32.7 per cent decline in its net profit at Rs 717 crore, it informed the stock exchanges.

The bank's core net interest income grew 15.4 per cent in the March quarter to Rs 2,105 crore on the back of a 0.30 per cent expansion in the net interest margin to 2.8 per cent and an over 12 per cent credit growth.

The overall deposits grew by over 10 per cent.

The non-interest income was up 22.8 per cent to Rs 1,082 crore, and was led by core fee income, especially the one coming from retail side.

Its overall provisions in the reporting quarter were up 127 per cent to Rs 618 crore, which dented the bottom line and was one of the prime reasons for the drop in profits.

Provisions for non-performing advances shot up to Rs 1,311 crore, as against Rs 227 crore in the year-ago period.

Its managing director and chief executive Prashant Kumar told reporters that the ageing-related provisions are hampering the number and going ahead, it does not expect provisions to extract a toll on the overall profits as it will have better recoveries from the soured advances and also lower slippages.

On the asset quality front, the bank, which transferred nearly Rs 50,000 crore of dud assets to an asset reconstruction company, reported gross non performing assets ratio at 2.2 per cent, as against 2 per cent in the December quarter, on the back of nearly Rs 1,200 crore in slippages.

Kumar said he expects the slippages to trend down in FY24, without giving a number.

The bank is targeting a 15-20 per cent loan growth in FY24 led by the retail segment at 30 per cent, Kumar said, adding that the large corporate segment is expected to grow at 5 per cent after two years of fall.

Exposure to the large corporate segment, which had got the bank to a brink three years ago, resulting in a massive rescue act, is now down 40 per cent from the peaks, Kumar said, adding that it went down 26 per cent in FY23 alone.

The bank, however, witnessed a slowing down of disbursements in the March quarter when compared with the preceding December quarter, despite the last quarter of the fiscal being one where disbursements happen faster.

Kumar attributed this to a cautious stance taken by the bank given the current environment of high interest rates.

The bank's overall capital adequacy stood at over 17 per cent, and the bank does not have any capital raising plans at present, Kumar said, adding that it is also not aware about any of the investors exiting.

It added over 3,000 employees during FY23 to take its overall staff strength to 27,517 at the end of the quarter.

Kumar said it is at the peak of investments into human resources, information technology and branches, and the high cost to income ratio will come down in the new fiscal as it realises the gains from such spends.

Going forward, all the necessary factors for a sustained growth in profits have been put in place now, Kumar said.