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YES Bank Q1 FY 2025 Earnings Call Summary
Earnings Call Overview • Date: July 22, 2024 • Transcript submitted on July 26, 2024 • Key Executives: • Prashant Kumar (MD & CEO) • Niranjan Banodkar (CFO) • Purpose: Discuss un-audited financial results for Q1 FY 2025
Financial Performance Highlights • Profit: Highest quarterly profit since reconstruction at INR 502 crores (46.7% YoY increase) • Return on Assets (ROA): Maintained at 0.5% • Net Non-Performing Asset (NPA) Ratio: Improved to 0.5% • Net Interest Income: Grew by 12.2% YoY • Core Fee Income: Increased by 20.5% • Cost-to-Income Ratio: Reduced to 71.8% • Gross NPAs: Improved to 1.7% • Deposits: Grew by 20.8% YoY (CASA ratio at 30.8%) • Advances: Grew by 14.7%, with notable growth in SME and mid-corporate segments • Credit Rating Upgrades: Received from Moody's and ICRA
Market Position and Liquidity • UPI Transactions: Slight market share increase, future moderation anticipated • Liquidity Coverage Ratio (LCR): Healthy at 137.8% • Common Equity Tier 1 (CET1) Ratio: 13.3% • Total Capital Adequacy: 16.5% • Focus: Strengthening core franchise and digital payments ecosystem
Investor Inquiries and Responses • Security Receipts (SRs): Clarified discrepancy in reported gains and actual recovery • Unsecured Loan Book: Policy changes leading to muted growth; stabilization expected in 1-2 quarters • Fee Income and Treasury Gains: Strong core fee growth despite subdued treasury performance • Loan Growth: • SME and Mid-Corporate sectors expected mid-20s growth • Retail growth projected low double-digit to teens • Large Corporate sector showing improved growth
Priority Sector Lending (PSL) Impact • Over two-thirds of PSL compliance achieved through inorganic means in FY '24 • Goal to increase organic share and reduce reliance on high-cost compliance methods • RIDF book expected to decrease, positively impacting margins by FY '26 and '27 • Retail slippages primarily from unsecured loans; measures in place to enhance collections
Conclusion • The call concluded with appreciation for participants and a call to support Team India ahead of the Paris Olympics 2024.
YES Bank Earnings Call Summary (April 29, 2024)
Financial Performance • Net Profit: INR 1,251 crores, up 74.4% YoY. • Return on Assets (ROA): 0.5% for Q4. • Net Interest Margin (NIM): 2.4% for the fiscal year. • Non-Interest Income: Grew by 39% YoY. • Cost-to-Income Ratio: Improved slightly. • Operating Profit Before Provisions (PPOP): Increased by 6.4% YoY.
Asset Quality Improvements • Gross NPA: Decreased to 1.7%. • Net NPA: Decreased to 0.6%, with a reduction of over 50%. • Provision Coverage Ratio (PCR): Increased to 66.6%. • Gross Slippages: Slightly rose to INR 1,356 crores; net slippages decreased to INR 370 crores.
Balance Sheet Highlights • Total Assets: Surpassed INR 4 lakh crores, 14% YoY growth. • Deposits: Reached INR 2.6 lakh crores, up 22.5% YoY. • CASA Ratio: Improved to 30.9%. • Net Advances: Grew by 13.8%.
Strategic Initiatives • Digital Payment Partnerships: Announced to enhance capabilities. • Workplace Recognition: Recognized as a top workplace in BFSI sector. • Focus on ROA Expansion: Continued emphasis on improving profitability.
Future Outlook • Margin Outlook for FY '25: Expected improvement due to reduced RIDF balances and better retail asset quality. • Recovery Targets for FY '25: Anticipated to exceed INR 5,000 crores, potentially reaching INR 6,000 crores. • Slippage Rate Projections: Expected to stabilize between 2% to 2.5%.
Additional Insights • Security Receipts: Carrying value decreased from INR 1,700 crores to INR 1,250 crores; P&L benefit of INR 700 crores for FY 24. • Microfinance Acquisition Plans: Exploring opportunities but no progress yet. • Loan-to-Deposit Ratio (LDR): Comfortable at 85%, with a preference for deposit growth to outpace loan growth.
Conclusion • Management's Commitment: Emphasized disciplined execution and strategic objectives for future profitability.
YES Bank Q3 Earnings Call Summary
Earnings Call Overview • Date: February 2, 2024 • Focus: Unaudited financial results for Q3 and nine months ending December 31, 2023 • Key Executives: Managing Director Prashant Kumar and other senior management
Profitability Improvement Strategy • Five main drivers: • Reduction in PSL shortfall • Improvement in CASA mix • Enhanced asset yields • Increased non-interest income • Reduced cost-to-income ratio
Key Financial Highlights • Deposit Growth: 15% year-on-year • CASA Ratio: Improved to 29.7% • Advances Growth: • SME segment: 24% • Mid-market segment: 26.4% • Net Interest Margin: Expanded to 2.4% • Net Profit: INR 231 crores (up 349% year-on-year) • Asset Quality: Net NPA reduced to 1.7%
Innovations and Recognitions • Launched Inter Operable Cardless Cash Withdrawal Framework via UPI • Integrated with a leading brokerage for secondary ASBA services • Achieved highest S&P Global ESG scores among Indian banks • Included in BSE Next 50 and BSE 100 indices • Received "Great Place to Work" certification for the second consecutive year
Management Insights • Focus on stabilizing retail slippages and improving CASA ratios • Tightened underwriting criteria for personal loans • Loan-to-Deposit Ratio (LDR): 90% • Projected timeline for achieving 1% Return on Assets (RoA): FY26
Challenges and Responses • Concerns about retail segment slippages, particularly among new-to-credit customers • Addressed issues with loan disbursement growth and market expectations • Emphasized customer-centricity and technology improvements for better service
Future Outlook • Projected 5% to 10% improvement in ROA over the next 6 to 9 months • Long-term focus on profitability and asset quality improvement • Acknowledged the need for better management of market expectations
Closing Remarks • Prashant Kumar thanked participants for their engagement and reiterated the bank's commitment to growth and customer satisfaction.
YES Bank Limited Earnings Call Summary (October 26, 2023)
Overview • Earnings call held on October 23, 2023, discussing Q2 and half-year results ending September 30, 2023. • CEO Prashant Kumar highlighted a positive macroeconomic environment.
Financial Performance • Retail advances exceeded ₹1 lakh crore. • CASA ratio maintained at 29.4%. • Anticipated mid-teen growth in loans and advances. • Targeting a medium-term return on assets of 1%.
Digital Banking Initiatives • Focus on enhancing digital capabilities. • Launched new products: mobile banking solution and co-branded credit cards. • Significant growth in UPI transactions (from 2-3 billion to 10 billion per month).
Q&A Highlights • Cost-to-Income Ratio: • Currently between 70%-75% due to investments in branches and technology. • Plans to open 150 branches; expect ratio to decrease with benefits from investments.
• Retail Portfolio Concerns: • High slippage rates and lower recoveries acknowledged. • Strategic slowdown in certain retail products to focus on profitability; projecting retail loan growth to decrease to around 25%.
• Corporate Sector Strategy: • Aiming for a balance between retail (50%) and corporate segments (35%). • Focus on risk management and improving returns.
• PPOP and Credit Costs: • PPOP to assets stable around 90 basis points; expected to improve to over 2% in the medium term. • Provisioning coverage ratio (PCR) increased to 56%; target PCR of 70-75% by year-end.
Technological Advancements • Continued investment in technology and digital initiatives. • Participation in Central Bank Digital Currency (CBDC) initiative. • Launch of new mobile app, IRIS, with over 75 features.
Additional Insights • RIDF balances at ₹32,000 crores, expected to rise to ₹40,000-41,000 crores. • Recent redemptions of security receipts positively impacted P&L by approximately ₹300 crores. • Government deposits at ₹20,000 crores are sustainable and expected to grow.
Conclusion • Prashant Kumar expressed optimism about the bank's future and thanked participants, wishing them a happy festive season.
YES Bank Q1 FY24 Earnings Call Summary
Earnings Call Overview • Date: July 24, 2023 • Key Executives: MD and CEO Prashant Kumar • Financial Performance Highlights: • 10% year-on-year growth in advances • Retail segment growth: 31.3% • SME segment growth: 24.1% • Net profit increased by 10.3% to INR 343 crores • Gross NPA ratio improved to 2% from 2.2% • Strong growth in non-interest income • Launched refreshed brand identity
Future Plans and Strategies • Microfinance Sector Acquisitions: • Pursuing inorganic growth to enhance asset book • Expected to finalize acquisitions within the current financial year • Net Interest Income (NII) Growth: • Anticipated improvement in loan growth and NII • Capital Updates: • CET1 capital increased by 35-40 basis points • Branch Expansion: • 150 new branches planned for the financial year • 25% increase in marketing budget for brand initiatives • Hiring of 500 additional employees by March 2024
Restructured Book and Loan Performance • Restructured Book Status: • Nearly all under moratorium are out • 57% of advances are floating • Minimal slippage from the restructured book • Loan Details: • 18% linked to MCLR, 26% to repo rates • Re-pricing expected in the next two quarters • Dividends: • To be considered once profitability improves • Medium-term ROA Target: • Aiming for 1% through improved CASA ratios and loan growth
Operational Insights • Security Receipts: • Redemption resulted in cash inflow • RIDF Deposits: • Stable at 8-9% of the balance sheet • Strategies to reduce future RIDF requirements: • Increase organic asset creation • Purchase PSLCs • Explore inorganic growth opportunities • Credit Yield and Strategy: • Focus on retail products with better margins • Targeting 15-20% credit growth and over 20% deposit growth
Retail Strategy • Business Distribution: • 23% from branch networks, 37-38% from internal channels • Aim to increase internal business to 25% • External channels contribute about 60% • Approval Rates: • Personal loans approval rates around 60-62% • Retail Slippages: • Expected to remain around 3%, with slight improvements anticipated • Credit Costs: • Expected to remain between 40-50 basis points
Conclusion • Assurance of ongoing transformation and improved execution of strategy by management.
YES Bank Earnings Call Summary (Q4 and FY23)
Submission Details • Date of submission: April 28, 2023 • Earnings call date: April 24, 2023 • Participants: Key management members, including MD and CEO Prashant Kumar • Compliance: Transcript available on the bank's website per SEBI regulations • Signed by: Shivanand R. Shettigar, Company Secretary
Financial Highlights • Strategic Shift: Focus on granular franchise • Retail assets: 45% of total assets • Retail liabilities: 53% • Asset Quality Improvement: • Net NPA reduced from 4.8% to 2.4% • GNPA ratio: 2.2% • Net NPA ratio: 0.8% • Profitability: • Q4 profit: INR 202 crores • FY23 profit: INR 771 crores (second consecutive year of profitability) • Growth Metrics: • 15.7% YoY increase in net interest income for Q4 • 22.6% rise in normalized operating profit for FY23
Key Discussions • Recovery Timeline: • INR 1,100 crores collected in current quarter • Projected credit costs for FY24: 40-50 basis points • Growth Outlook: • Upward momentum in margins due to strong CASA deposit growth • Focus on average balances for liquidity management • Warrant Conversion: • Funds expected to flow into CET-1 within 18 months • PPOP Margins: • Elevated costs due to retail and IT investments • Focus on operational efficiencies to improve margins
Investor Inquiries • Concerns on Provisions and EPS: • Core operating profits improving; provisions necessary for asset quality • Emphasis on strengthening balance sheet over immediate profits • Credit-Deposit Ratio: • Targeting a CD ratio around 90% • Loan growth target: 15-20%, deposit growth: around 20% • Return on Assets (ROA): • Current ROA below guidance; confidence in achieving 40-50 basis points in FY24
Financial Metrics Overview • Advances: 57% of total assets • Investments: 22% as of March 2023 • Decline in net profit from INR 1,000 crores in FY22 to INR 750 crores in FY23 due to high cost-to-income ratios • Projected improvement in cost-to-income ratio over the next 3-4 years
Conclusion • Confidence in strategic direction and commitment to delivering value to stakeholders.
YES Bank Q3 Earnings Call Summary
Overview of Performance • Date of Call: January 24, 2023 • Key Executives: MD and CEO Prashant Kumar • Operating Profit: INR 914 crores (16% increase QoQ) • Net Profit: INR 52 crores (affected by provisioning) • Advances Growth: 10.4% YoY, strong in retail and SME segments • Deposits Growth: 16% YoY • NPA Ratios: • GNPA: 2% • Net NPA: 1% • CET Ratio: Improved to 13%
Key Inquiries and Responses • Impact of Loan Sales on Margins: • Retail deposits growing faster than corporate deposits. • ARC transaction impact to be clearer in the current quarter.
• ECL Circular Feedback: • Neutral overall impact; increased provisioning for Category 2 loans offset by decreased for Category 3 loans.
• ARC Transaction Details: • Sold assets for INR 8,000 crores against a carrying value of INR 5,000 crores. • Unrealized gains not recognized immediately; cash recorded upfront.
Provisioning Insights • Gross Provisioning: INR 3,000 crores release offset by security receipts provisioning. • Net Provisioning for NPAs: INR 2,000 crores, with INR 850 crores related to aging and slippages. • Future Provisioning Projection: Stabilization around INR 200 crores for new slippages.
Security Receipts and Telecom Exposure • Security Receipts: Mix of service standard and substandard categories; potential for recoveries. • Telecom Sector Exposure: Estimated between INR 3,000 to INR 5,000 crores; 60% reduction noted.
Additional Financial Metrics • Risk-Weighted Assets (RWA): INR 2,43,000 crores. • SMA Movement: SMA 2 decreased, SMA 1 increased due to timing issues. • Loan Mix: • 29% EBLR • 23% MCLR • 4-5% other floating rates • Remainder fixed-rate loans.
Closing Remarks • Significance of the Quarter: Successful capital raising and asset transfers leading to a stronger capital base and improved NPA ratios, positioning the bank for future growth and profitability.