{"id":158119,"date":"2024-01-29T11:53:19","date_gmt":"2024-01-29T16:53:19","guid":{"rendered":"https:\/\/44.250.171.167\/?p=158119"},"modified":"2024-01-29T11:53:20","modified_gmt":"2024-01-29T16:53:20","slug":"yes-bank-limited-q3-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/yes-bank-limited-q3-fy24-earnings-conference-call-insights\/","title":{"rendered":"Yes Bank Limited Q3 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Yes Bank Limited (YESBANK) Q3 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>Deposit Growth<\/strong>\n<ul>\n<li>15% Y-o-Y growth in deposits excluding certificates of deposit.<\/li>\n<li>CASA ratio improved to 29.7% from 29.4% last quarter.<\/li>\n<li>Branch banking deposits grew 22% Y-o-Y.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Margin and Advances<\/strong>\n<ul>\n<li>NIM expanded by 10 bps Q-o-Q to 2.4%, driven by balance sheet management despite flat yields.<\/li>\n<li>Sustained growth seen in SME; 24% Y-o-Y and mid-market; 26.4% Y-o-Y.<\/li>\n<li>Helps drive core fee income and low cost funds.<\/li>\n<li>30 bps Q-o-Q reduction seen in net NPAs.<\/li>\n<li>Net carrying value of SRs also improved to 1.7% of advances.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Cost of Funds Outlook<\/strong>\n<ul>\n<li>Bulk of repricing absorbed till September 2022.<\/li>\n<li>Minimal impact seen over next 1-2 quarters.<\/li>\n<li>Efforts on for deposit mobilization to continue.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Retail Portfolio Slippages<\/strong>\n<ul>\n<li>Driven by unsecured assets segment.<\/li>\n<li>Measures taken to tighten credit processes and scorecards.<\/li>\n<li>Expect slippages to plateau before starting to decline.<\/li>\n<\/ul>\n<\/li>\n<li><strong>CASA Growth Drivers<\/strong>\n<ul>\n<li>Focused execution plan for CASA mobilization.<\/li>\n<li>Alignment of incentives for customer acquisition and balance retention.<\/li>\n<li>Operating at lower CASA ratio currently provides headroom.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Personal Loans Portfolio<\/strong>\n<ul>\n<li>Concerns mainly in new to credit and low income segments.<\/li>\n<li>Measures taken like tighter credit norms and income thresholds.<\/li>\n<li>Expect slippages to plateau before declining going forward.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Security Receipts Realization<\/strong>\n<ul>\n<li>Redeemed INR2,500 crores out of INR1,853 crores SRs in one year.<\/li>\n<li>Remaining SRs carrying value reduced to 0.8% with 73.2% coverage.<\/li>\n<li>Guidance to reduce net NPAs and SRs below 1% in coming quarters.<\/li>\n<\/ul>\n<\/li>\n<li><strong>PSL Compliance<\/strong>\n<ul>\n<li>PSL compliance improving but 11% of assets still in lower yielding RIDF.<\/li>\n<li>This drags ROA, making 1% target unlikely by FY25; FY26 more realistic.<\/li>\n<li>Working on PSL compliance through organic channels and inorganic acquisition.<\/li>\n<li>Expect minimal PSL non-compliance by FY24 across subcategories.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Retail Portfolio<\/strong>\n<ul>\n<li>Higher retail slippages this quarter, especially in personal loans.<\/li>\n<li>Taking corrective actions to plug slippages and normalize delinquency.<\/li>\n<li>Seeing recoveries and upgrades helping contain net slippages to 1-1.1%.<\/li>\n<li>Retail portfolio growth steady around 13-15%.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Corporate Portfolio<\/strong>\n<ul>\n<li>New corporate disbursements being offset by repayments of legacy loans.<\/li>\n<li>Legacy loans being consciously reduced, especially in real estate and hospitality.<\/li>\n<li>Net degrowth in corporate book as legacy loans repaid.<\/li>\n<li>New disbursements focused on working capital and transactional lending.<\/li>\n<\/ul>\n<\/li>\n<li><strong>ROA Outlook<\/strong>\n<ul>\n<li>1% ROA target important but focused on core operating profit delivery.<\/li>\n<li>Unlikely to achieve 1% ROA by FY25 due to drags like RIDF.<\/li>\n<li>More realistic timeline FY26 based on strategy execution.<\/li>\n<li>Priority to reduce drags like SRs while boosting core profitability.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Market Profit Expectation<\/strong>\n<ul>\n<li>Focus is on long-term ROA path, not beating quarterly expectations.<\/li>\n<li>Communicated 1% ROA target as a 2-3 year journey requiring execution.<\/li>\n<li>External factors like interest rates impacted profitability this quarter.<\/li>\n<li>Priority is strengthening fundamentals like PCR, not profit beats.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Security Receipts<\/strong>\n<ul>\n<li>Gross SRs reduced from INR8,000 cr to INR6,000 cr, 25% decline.<\/li>\n<li>But net SRs just 0.8% of advances or INR1,850 cr due to provisions.<\/li>\n<li>Once provisions become zero, recoveries will boost profits.<\/li>\n<li>SR resolutions already benefiting NII currently.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Yes Bank Limited (YESBANK) Q3 FY24 Earnings Concall Deposit Growth 15% Y-o-Y growth in deposits excluding certificates of deposit. CASA ratio improved to 29.7% from 29.4% last quarter. Branch banking deposits grew 22% Y-o-Y. Margin and Advances NIM expanded by 10 bps Q-o-Q to 2.4%, driven by balance sheet management despite flat [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,1],"tags":[151,10169,8265],"class_list":["post-158119","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-finance-stocks","tag-banking","tag-earnings","tag-finance"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":157981,"url":"https:\/\/alphastreet.com\/india\/axis-bank-ltd-q3-fy24-earnings-conference-call-insights\/","url_meta":{"origin":158119,"position":0},"title":"Axis Bank Ltd Q3 FY24 Earnings Conference Call Insights","author":"Praveen","date":"January 24, 2024","format":false,"excerpt":"Key highlights from Axis Bank Ltd (AXISBANK) Q3 FY24 Earnings Concall GPS Strategy Performance Bank delivered over 18% ROE for last 6 quarters while maintaining better credit profile compared to past. 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