Yes Bank Q4 Results: Net Profit Falls 45% On Higher Provisions, Expenses

Private sector lender Yes Bank saw its January-March profit fall by almost 45% year-on-year on account of higher provisioning and elevated operating expenses.

The bank reported a net profit of Rs 202 crore for the final quarter of FY23. Analysts polled by Bloomberg estimated a Rs 257 crore net profit for the three-month period. 

Net interest income, or core income, for the bank rose 15.7% from a year ago to Rs 2,105 crore. Other income too rose 22.7% year-on-year to Rs 1,082 crore.

Yes Bank's provisions for the quarter—excluding taxes—rose 127.8% year-on-year to Rs 617 crore. The bank's operating expenses also ticked up by 19.3% year-on-year to reach Rs 2,299 crore.

"The higher provisioning is mainly on our loans and security receipts," Prashant Kumar, MD and CEO of Yes Bank, said during a conference call for the bank's Q4 FY23 earnings. The bank also sees no need to make provisions related to additional tier-1 bonds, Kumar said.

In February, Yes Bank Ltd. approached the Supreme Court challenging a Jan. 20 order of the Bombay High Court that quashed the write-off of the additional tier-1 bonds by the private lender, BQ Prime reported at the time.

The bank has utilised its higher recoveries and upgrades over FY23 to boost its provisions to raise its provision coverage ratio and normalise credit costs over the near term, Kumar said in a statement accompanying the earnings report.

The bank's current accounts and savings accounts (CASA) ratio also declined by 30 basis points on a year-on-year basis in Q4 FY23 and stood at 30.8%.

Yes Bank's overall CASA base stood at Rs 66,903 crore as of March 31, denoting a year-on-year rise of 9.0%.

Asset Quality

Gross non-performing asset ratio for the bank rose by 17 basis points sequentially to 2.17%. The net NPA improved to 0.83% as of March 31, compared with 1.03% as of December 31. 

The bank's slippages have also come down on both a year-on-year and sequential basis, Kumar said during the conference call. Yes Bank expects its recoveries to stand around Rs 5,000 crore over FY24, Kumar added.

Credit Growth

Yes Bank's net advances for the quarter rose by 12.2% on year-on-year basis in Q4 FY23 and stood at Rs 2.03 lakh crore. Similarly, the bank's deposit base also rose to Rs 2.17 lakh crore, denoting a year-on-year rise of 10.3% from 1.97 lakh crore in Q4 FY22.

Yes Bank's growth in advances over the quarter was driven by retail loans which stood at Rs 90,000 crore in Q4 FY23, up by 38.6% year-on-year.

"We are not expecting credit growth over 5% on the large corporate side," Kumar said during the conference call. For large corporate borrowers, the bank is also unable to meet the pricing expectations for good borrowers, Kumar added.

Yes Bank currently has a CET-1 ratio of 13.3% and its expected to rise to 14.5% following the conversion of warrants, Kumar said. Therefore the bank see no need to raise additional capital, he added.