Yes Bank Q4 Results: Net profit jumps 123% Y-o-Y to ₹452 crore, NIMs steady at 2.4%; asset quality improves

Yes Bank Q4 Results Highlights: Indian Private lender YES Bank reported a remarkable 123% year-on-year increase in net profit for the fourth quarter (Q4) of FY24, rising to ₹452 crore from ₹202.4 crore in the same quarter last year, significantly surpassing analysts' expectations. Sequentially, profits rose by 95.2% from the previous quarter, as per the earnings report on April 27, 2024.

NIMs remains steady Q-o-Q at 2.4% for Q4FY24

Net Interest Margins (NIM) held steady at 2.4% for Q4FY24, consistent with the previous quarter. The bank experienced robust growth in non-interest income, with a 56.3% increase year-on-year and a 31.3% rise quarter-over-quarter in Q4FY24, culminating in a 38.8% annual increase for FY24.

Prashant Kumar, Managing Director and CEO of YES BANK, said, “This quarter demonstrates a significant step in the RoA expansion journey, with Q4FY24 RoA expanding to 0.5 per cent This is despite the one-off gains from tax refunds, SR recoveries and ARC Sale, being prudently utilized for strengthening the Asset Quality metrics- for instance, the NNPA + Net Carrying value of SRs have more than halved over the course of the year to 1.1 per cent from 2.4 per cent in FY23.

“Moreover, we continue to witness strong momentum in our liability franchise with growth in Deposits expanding to over 20 per cent Y-o-Y for the first time in the last 8 quarters. Importantly, despite the challenging environment during the course of the year, our CASA ratio has expanded 10 bps Y-o-Y to 30.9 per cent,” he further added.

“As the Bank embarks on the fifth year of this new journey, we remain focused on diligently executing the RoA expansion roadmap,” the CEO said.

The bank's Return on Assets (RoA) improved to 0.5 per cent in Q4FY24 from 0.2 per cent in both the preceding quarter and the same quarter of the previous year. This reflects the bank's effective strategic initiatives to enhance asset utilization and profitability. Net Interest Income (NII) for the quarter increased by 6.8 per cent quarter-over-quarter and 2.3 per cent year-over-year to ₹2,153 crores. Additionally, non-interest income surged by 56.3 per cent year-over-year to ₹1,569 crores, fueled by diverse and granular fee streams.

The bank's asset quality improved notably, with the Gross Non-Performing Asset (GNPA) ratio falling to 1.7% and the NNPA ratio reducing to 0.6%. The provision coverage ratio remained robust at 79.3%.

On the operational front, the bank's operating costs rose to ₹2,819 crores, a 27.0% increase year-over-year, partly driven by expenses related to Priority Sector Lending Certificates (PSLC). Excluding these costs, operating expenses for the quarter grew by a more moderate 15.5% year-over-year. Operating profit for the quarter was ₹902 crores, reflecting increases of 1.5% year-over-year and 4.4% quarter-over-quarter.

Total assets grew by 14.3% year-over-year to ₹405,493 crores, while deposits saw a 22.5% increase to ₹266,372 crores, and net advances rose by 12.1% to ₹227,799 crores.

Collaboration with Paytm led growth and outlook

During the fourth quarter, Yes bank started functioning as PSP Payment Bank to existing & new consumers of Paytm. "Earlier we were doing 3.3 millon transactions, after Paytm Payment bank customers moved to Yes bank, we are handling 5 m transactions per month," said Kumar. "entire merchant ecosystem has moved to yes bank. Collections on merchant market share is at 55%. going forward we need to see how we can enhance cross sell," added Kumar.

Kumar said that the bank will look at 18.5% growth in deposits and 17% growth in loan books. This loan growth will be driven by micro, small and medium enterprises and mid-market segment. Large corporate loan book has also started growing, he added.