Table of Content
Introduction
As the 6th largest private sector bank in India, YES Bank offers a full service wholesale, commercial, and retail banking portfolio to its customers. The bank, under the subsidiary YES Securities, offers merchant, investment and brokerage banking services as well. Although the bulk of the customer mix is around retail customers and the SME segment, the bank is present across mid-large corporates as well. Its pan-India presence is marked by the availability of traditional and fully-digital channels.
YES Bank’s Q2 results make for an interesting read. While it did not surpass or even meet expectations in some regards, there were a lot of positives that can be taken from it. Here’s a quick synopsis for you.
Additional Read: Q2 Results Dashboard
Performance Highlights
- Total Income: ₹ 3,135 Cr
- Net Interest Income: ₹ 1,925 Cr
- Non-Interest Income: ₹ 1,210 Cr
- Operating Profit: ₹ 801 Cr
- Profit After Tax (PAT): ₹ 225 Cr
YES Bank’s total income for the quarter ending 30 Sep, 2023 stood at ₹ 3,135 Cr. While this is 9.4% higher than the same quarter last year, it is 0.2% lower compared to the previous quarter of the current financial year. The net interest income (₹ 1,925 Cr) took a bit of a beating and was down 3.3% YoY and 3.7% QoQ. However, the non-interest income showed a big upswing when compared to Q FY 22-23. It rose 38.4% to reach ₹ 1,210 Cr, 6% higher sequentially. The non-interest income comprises corporate trades and cash management fees that grew by 36.6% YoY, gain on investments, and retail banking fees that saw an overall jump of 52.5% YoY.
A YoY reduction of ₹ 83 Cr in provisions (Q2 value ₹ 500 Cr) and a higher Profit Before Tax (PBT) of ₹ 301 Cr saw YES Bank post a PAT of ₹ 225 Cr – an impressive 47.4% growth YoY. When compared to the previous quarter of this FY though, this was 34.3% lower as the Q1 FY 23-24 PAT stood at ₹ 343 Cr.
Also Read: Yes Bank Share Price
Key Financial Ratios
- Net interest margin (NIM): 2.3%
- CD Ratio: 89.2%
- CASA Ratio: 29.4%
- C/I Ratio: 74.4%
- CET 1 Ratio: 13.1%
- Gross NPA: 2.0%
- Net NPA: 0.9%
- Net Carrying Value of SRs as % of Advances: 1.1%
- Average LCR: 120.9%
- Advances Mix (Retail & SME: Mid Corp: Corporate): 63%:14%:23%
- Yield on Advances: 10.1%
- Cost of Funds: 6.3%
- Cost of Deposits: 6.0%
The Net Interest Margin dropped from 2.6% in Q2 FY 23 to 2.3% in the quarter ended on 30 Sep, 2023. It was 2.5% in Q1 this year marking a YoY and QoQ decline. The CASA ratio, too, dropped from 31% Q2 last year to 29.4% in the recent quarter. However, it stayed the same as it was in the first quarter of the current financial year. There were 3.91 Lakhs CASA accounts that were opened in the quarter.
On the other hand, the cost-to-income ratio (C/I ratio) also witnessed a jump of 1.2% YoY to land at 74.4% for Q2 FY 23-24. The Common Equity Tier 1 (CET1) ratio also rose 1.4% YoY to reach 13.1%.
Both the GNPA and NNPA marked a significant drop to 2.0% and 0.9% respectively, denoting a sharp improvement in the quality of the bank’s assets. They stood at 12.9% and 3.6% respectively for Q2 last financial year. The Provision Coverage Ratio (PCR) of NPA was raised to 56.4% as compared to 48.4% in Q1 FY 23-24. Including technical write offs, the PCR stood at 72.1%. Recoveries and resolutions of around ₹ 1,352 Cr also helped the bank post robust numbers with respect to asset quality and receivables.
Operational Highlights
- The balance sheet saw a 9.2% YoY growth and was up 2.7% from Q1 FY 23-24. The company’s total assets stood at ₹ 3,65,223 Cr. Advances were up too (₹ 2,09,106 Cr), 8.7% YoY and 4.4% QoQ respectively.
- From an advances mix perspective, 63% of the bank’s advances were towards retail and SME customers, 14% towards mid-level corporates and the remaining 23% for large corporates. Retail advances crossed a value of ₹ 1,00,000 Cr while SME advances surpassed ₹ 30,000 Cr in total value. This marked a YoY jump of 27.2% and 25% in respective segments.
- Total disbursements rose to ₹ 28,077 Cr and total deposits went up 17.2% YoY to reach ₹ 2,34,360 Cr for the 3-month period ending 30 Sep, 2023.
- To reach a wider audience, YES Bank launched its digital mobile banking solution ‘ ‘iris by YES BANK’. Furthermore, UPI payments were introduced via RuPay cards and interoperability was enabled on RBI’s CBDC app.
- In Q2, Mr. Manish Jain was appointed as the Country Head for Wholesale Banking and Mr. Pankaj Sharma as the Chief Strategy and Transformation Officer
- Operating expenses (opex) grew by 12.5% YoY, largely due to increased premises costs owing to 83 new account branches opened
YoY and QoQ Performance Comparison
| Q2 FY24 | Q2 FY23 | Q1 FY24 | |
| Net Interest Income | ₹ 1,925 Cr | ₹ 1,991 Cr | ₹ 2,000 Cr |
| Non Interest Income | ₹ 1,210 Cr | ₹ 874 Cr | ₹ 1,141 Cr |
| Total Income | ₹ 3,135 Cr | ₹ 2,866 Cr | ₹ 3,141 Cr |
| Operating Expenses | ₹ 2,334 Cr | ₹ 2,075 Cr | ₹ 2,322 Cr |
| Operating Profit | ₹ 801 Cr | ₹ 790 Cr | ₹ 818 Cr |
| Provisions | ₹ 500 Cr | ₹ 583 Cr | ₹ 360 Cr |
| Profit Before Tax | ₹ 301 Cr | ₹ 208 Cr | ₹ 458 Cr |
| Net Profit | ₹ 225 Cr | ₹ 153 Cr | ₹ 343 Cr |
Source:
https://www.yesbank.in/pdf?name=q2_fy24_final_presentation_pdf.pdf
https://www.yesbank.in/pdf?name=q2_fy24_Press_Release.pdf
