YES Bank Q4: Lender records Rs 367 cr as net profit, NII up 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 lower provisions for recovery. Bloomberg analysts had estimated a loss of Rs 254 crore for the quarter.
Sequentially, net profit is up 38%. Additionally, the private bank in FY22 made a net profit of Rs 1,066 crore, the first full year of profit since FY2019.
Net interest income (NII) increased by 84% year-on-year (YoY) and 3.1% sequentially to reach Rs 1,819 crore. Non-interest income rose 28% year-on-year and 20% sequentially to Rs 882 crore. The lender’s non-interest margin (NIM) stood at 2.5% in Q4FY22.
Provisions dropped significantly to Rs 271 crore in Q4FY22 from Rs 5,113 crore a year ago. In the previous quarter, the bank provided Rs 375 crore.
Asset quality has improved, with gross non-performing assets (NPA) at 13.9% in Q4FY22, down 8 basis points sequentially. Net NPAs also improved by 8 basis points to 4.5%. The bank’s provision coverage ratio improved to 81.5%.
Resolution momentum continues to be strong on recoveries, with full recoveries and bank upgrades for FY22 at Rs 7,290 crore vs. Rs 5,782 for FY21; Cash grabs and upgrades from T4FY22 were Rs 1,828 crore for the bank. “We are targeting recoveries and upgrades of Rs 5,000 crore for the third consecutive year,” said Prashant Kumar, MD&CEO, YES Bank.
Advances from the lender increased 8% year-on-year and 3% sequentially to Rs 1.81 trillion. It saw the disbursement of nearly Rs 70,000 crore in FY22. The retail gross disbursement for the quarter was Rs 10,201. rural 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 improved by 300 basis points to 60:40, thus achieving the strategic objective a year ahead of schedule. Retail, SME and mid-sized businesses posted robust growth in advances of 31%, 16% and 32% on an annual basis, respectively for FY22.
“The mix between retail and corporate should improve further by 400 basis points. And the bank is targeting total advance growth of more than 15%, with 10% growth in the large corporate segment and more than 25% growth in the retail, SME and mid-sized business segment. said Kumar.
Deposits saw an increase of 21% year-on-year and 7% sequentially to reach 1.97 trillion rupees. The bank acquires over 100,000 CASA customers on a monthly basis. The growth in liabilities occurred despite the reduction in interest rates, which reflects our superior customer service and stakeholder confidence, Kumar said.
The bank has a capital adequacy ratio of 17.4% at the end of March 2022. “Current capital is sufficient to meet the bank’s growth aspirations in the current financial year (FY23) . When we raised Rs 15,000 crore in our FPO in July 2020, everyone on the street expected us to be back in the market within 12 months,” Kumar added.
Given the current period of uncertainty, it is important to have buffer capital, which is why the bank will seek to raise capital to create the buffer in the current financial year (FY23).
The process of forming the ARC and completing the transfer of distressed assets is well underway and the bank expects to complete this exercise in the current quarter (Q1FY22). The process of finalizing a partner is also underway.
We would offload the entire NPA raw pool to ARC, Kumar said. The way we are moving forward (with CRA plans) is in line with regulatory requirements, Kumar added.