Key highlights from Yes Bank Limited (YESBANK) Q1 FY23 Earnings Concall
Q&A Highlights:
- Mahrukh Adajania of Edelweiss asked about risk to the growth guidance. Prashant Kumar MD answered that as of now the bank is not seeing any impact on the demand side, either on the corporate side or on the retail and SME side. However, the bank is cautious as things are very uncertain.
- Mahrukh Adajania of Edelweiss also asked if deposit gathering will not be an issue, because of rising rates or due to HDFC Bank. Prashant Kumar MD replied that the issue is more due to decrease in liquidity. However, getting deposit to support loan growth is not a challenge right now, but the pricing for all the banks would go up in line with the movement in the rate of interest.
- Mahrukh Adajania of Edelweiss enquired about any outlook on margin. Prashant Kumar MD answered that the NIMs currently are at 2.4% and the bank is expecting NIMs for FY23 to be around 2.75%.
- Mahrukh Adajania of Edelweiss also asked if there was any mark-to-market loss in 1Q23. Niranjan Banodkar CFO clarified that the mark-to-market loss is about INR37 crores.
- Jai Mundhra with B&K Securities asked about the significance of an alternate Board and if it changes anything in terms of business. Prashant Kumar MD said the alternate Board will not be impacting the business. The point to note is that the bank has successfully come out of the reconstruction scheme.
- Jai Mundhra with B&K Securities enquired that on cost to income guidance of 75 bp ROA, what would be the cost to income for FY23. Prashant Kumar MD replied that for FY23, the bank’s guidance on the cost to income is 70-71%. And the reason for this is higher focus on retail and MSME.
- Saumya Jain of Emkay Global asked about the breakup of advances growth in retail and corporate. Prashant Kumar MD answered that on the retail and MSME, the bank is targeting more than 25% growth and on the large corporate 10%.
- Saurabh with JP Morgan asked that for the ROA guidance of 0.75%, the NIM assumption should be around 2.9% odd. Niranjan Banodkar CFO said that the bank should be exiting at about 2.9% for 4Q23 and for the full year, at about 2.7-2.75%.
- Saurabh with JP Morgan asked that on the large infrastructure accounts, what’s the expectation it could slip to forward quarters. Niranjan Banodkar CFO replied that the bank is not seeing any possibility of this account slipping into NPA category.
- Sri Karthik of Investec asked about the capital implication for the ARC transaction. Prashant Kumar MD said that due to some accounting, it would be having an impact on revenue. Otherwise, it’s a capital usage for YESBANK.
- Anand Dama from Emkay Global asked if all of the INR48,000 crores of NPAs moving out to ARC will be part of current GNPA pool and the net carrying value sitting in NNPA pool. Prashant Kumar MD answered that it also includes almost INR15,000 crores which has been written off. And the net carrying value is INR8,300 crores.