YES Bank Q1 result: Net profit rises 47% to Rs 502 cr as provisions fall

Private sector lender YES Bank’s net profit rose by 46.7 per cent to Rs 502 crore during first quarter of FY25 (Q1 FY25) from Rs 343 crore in the previous corresponding period, owing to healthy increase in net interest income 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.

The bank’s net interest income (NII) grew by 12.2 per cent to Rs 2,244 crore in the reported quarter, compared to Rs 2,000 crore in the same quarter a year ago. Sequentially, NII rose by 4.2 per cent from Rs 2,153 crore in Q4FY24.

 

Its provisions declined by 41.2 per cent to Rs 212 crore in Q1 FY25, from Rs 360 crore in the year-ago period. 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 Q1 of FY24. Sequentially, NIM was flat at 2.4 per cent in Q4 of FY24.

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. Total deposits increased 20.8 per cent Y-o-Y to Rs 2.65 trillion. However, it slipped by 0.5 per cent from Q4 FY24.

In a post earnings media call, Prashant Kumar, MD & CEO of Yes Bank said that the lender is targeting a loan growth of 16 to17 per cent and a deposit growth of 20 to 22 per cent in FY25. The credit growth will be led by the SME and mid-market segment.

Kumar also added that Yes Bank has taken corrective steps and adopted a cautious approach towards onboarding customers in both the credit card and unsecured portfolio while also strengthening collection mechanisms and underwriting standards to contain the stress witnessed in the segments.

The share of low-cost deposits — current account and saving account (Casa) ratio — stood at 30.8 per cent at the end of June 2024, from 29.4 per cent a year ago. Sequentially, it slipped from 30.9 per cent at the end of March 2024.

During the quarter under review, the credit to deposit (CD) ratio of the bank was at 86.6 per cent compared to 91.3 per cent in Q1 FY24. Sequentially, it was up from 85.5 per cent in Q4 FY24.

Its 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.

Further, the lender plans to reduce the quantum of Rural Infrastructure Development Fund (RIDF) balances over 2-3 years timeframe. Kumar said that the fund which accounts for Rs 44,000 crore, Out of which Rs 11,000 crore will come back in the current year (FY25). 

“So currently the RIDF at Rs 44,000 crore translates to about 11 per cent of our total assets.  We expect that over the next 3 years that we should start operating at less than 5 per cent of our total assets,” Kumar said during the post-earnings call.