YES Bank surges 5% after Q1FY25 profit rises 47%, provisions fall 41%

YES Bank Q1 results impact: Shares of YES Bank soared as much as 4.88 per cent to hit  an intraday high of Rs 25.99 per share.

The jump in the stock price came on the back of strong June quarter results (Q1FY25). 

The private lender’s profit zoomed 46.7 per cent on year-on-year (Y-o-Y) basis to Rs 502 crore during first quarter of FY25 (Q1FY25), as opposed to Rs 343 crore in the same quarter a year ago (Q1FY24). The improvement in profit came on the back of a healthy increase in net interest income (NII) and sharp fall in provisions.

Sequentially, the Mumbai-based lender’s profit rose by 11.2 per cent from Rs 452 crore in the last quarter of FY24.

YES Bank’s net interest income (NII) rose 12.2 per cent to Rs 2,244 crore in Q1FY25, as compared to Rs 2,000 crore in the same quarter a year ago (Q1FY24). Sequentially, NII soared 4.2 per cent from Rs 2,153 crore in Q4FY24.

Notably, the lenders’ provisions declined 41.2 per cent to Rs 212 crore in Q1FY25, from Rs 360 crore in Q1FY24. Sequentially, provisions declined from Rs 471 crore in Q4 FY24.

The bank’s net interest margin (NIM) slipped to 2.4 per cent from 2.5 per cent in the June quarter of FY24. Sequentially, NIM was flat at 2.4 per cent in Q4 of FY24.

“The Bank has started the financial year on a strong footing with RoA sustaining Q-o-Q at 0.5% despite seasonality of Q1 and NIL PSL shortfalls. While the Income Engines are continuing to fire with normalised Net Income Growth at 15% Y-o-Y, the Bank has been able to contain the Operating Cost growth at 8.0% Y-o-Y (exPSLCs). At the same time, the resolution momentum continues to be strong, leading to lower Net Credit Costs, which is also aiding in RoA expansion,” said Prashant Kumar, managing director & CEO of YES Bank.

Additionally, the bank’s advances grew 14.7 per cent Y-o-Y to Rs 2.29 trillion at the end of June 2024, while sequentially, it was up 0.8 per cent. Meanwhile, total deposits surged 20.8 per cent Y-o-Y to Rs 2.65 trillion. However, it slipped by 0.5 per cent from Q4 FY24.

In terms of asset quality, YES Bank’s gross non-performing assets (GNPA) declined to 1.7 per cent in June 2024 from 2 per cent a year ago. Sequentially, it was flat as compared to 1.7 per cent in March 2024. 

Net NPAs slipped to 0.5 per cent in the quarter under review from 1 per cent in the year-ago. Sequentially, net NPAs were down from 0.6 per cent in March 2024.

On the Balance Sheet front, Kumar believes, the bank is effectively executing its strategic objectives of sustained momentum in SME and Mid- Corporate segments, resumption of growth in Corporate segment and calibration in Retail Assets with focus on profitability. Similarly, the Retail and Branch Banking led Deposits continue to grow at a faster pace than Wholesale Deposits, he added. 

“Other key highlights of the quarter were i) exercise of outstanding Warrants by the Private Equity Investors, and ii) Credit Rating Outlook upgrade by Moody’s and Credit Rating upgrade by ICRA- these external stakeholder validations reinforce faith & confidence in the growth and profitability expansion trajectory of the franchise,” Kumar said. 

At 10:59 AM, shares of YES Bank were trading 2.58 per cent higher at Rs 25.42 per share. In comparison, BSE Sensex was trading 0.16 per cent higher at 80,730.01 levels.