Yes Bank Limited (NSE: YESBANK) Q4 2025 Earnings Call dated Apr. 19, 2025
Corporate Participants:
Prashant Kumar — Managing Director & Chief Executive Officer
Niranjan Banodkar — Chief Financial Officer
Analysts:
Dev — Analyst
Harsh Modi — Analyst
Jai Mundhra — Analyst
Sumeet Kariwala — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Yesbank’s Q4 FY ’25 and FY ’25 Earnings Conference Call. On the management panel, we have with us today Mr Prashant Kumar, Managing Director and Chief Executive Officer; Dr Rajan Painter, Executive Director; Mr Manish Jain, Executive Director; Mr Naranjan Banodgar, Chief Financial Officer; and Mr Sunil Parnani, Head of Investor Relations and Sustainability. MR. Prashant Kumar will now give you an overview of the results, which will be followed by a question-and-answer session. Thank you. As a reminder, all participant lines will be in listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded.
Before we further proceed with this call, please note, while all effort will be made that no unpublished price-sensitive information would get shared. In case of any inadertent disclosure, the same would in any case would from the part of recording of the call. Further, some of the statements made on today’s call could be forward-looking in nature. A note to this effect is provided in the Q4 FY ’25 and FY ’25 results presentation itself shared on the Bank’s website. I now hand the conference over to Mr Prashant Kumar. Thank you and over to you, sir.
Prashant Kumar — Managing Director & Chief Executive Officer
Thank you. Thank you so much. First of all, my apologies for delaying — for delaying this analyst call. But again, thank you so much and very good afternoon to all of you. And thank you for joining us today for our quarter-four and the full-year ’25 earnings call. On this call, I am accompanied by the senior team members of the bank.
Our like quarter-four has marked the completion of five years since March ’20. And as you might have been noticing, all along in these preceding five years, the bank has put in a lot of effort to continue to strengthen its franchise and steadily worked on several underlying themes to progressively keep improving its overall positioning and profitability. Some of the key outcomes of the efforts made by the team has been presented on Page 2 to 5 of the investor presentation. And as we look-ahead, we remain committed to continuing to work toward further strengthening the franchise and improving its profitability and staying and agile in our approach and action.
Before I come to our results, I would like to sincerely thank all our customers, yes, bankers, and all the different stakeholders, regulators, and the shareholders for their continued support to the best. Now talking about our results, last fiscal, we continue to make a steady improvement across all the core operating and progressed well on the key strategic objectives of improving the profitability of the bank. While I will call-out few of the key highlights here, you will kindly refer our investor presentation for more details.
We have reported a net profit of INR2,406 crores, which was up 92.3% Y-o-Y and the highest since March 2020. The Bank’s full-year return on assets has come in at 0.6% against 0.3% in FY ’24. Sequentially, the bank exited the year with an ROA of 0.7% in-quarter four. Despite the competitive macro-environment, full-year net interest margin remained stable at 2.4% and the Y-o-Y decline in yield on advances from 10.2 to 10.1 have been partially offset by marginally better yields on balances. However, for quarter-four, the net interest margin saw a sequential uptick of 10 basis-points and came in at 2.5%. This was actually supported by our efforts in containing the cost of deposits, reduction in high-cost borrowings, and lower RIDM balances.
FY ’25 net interest income of INR8,944 crores has actually gone up 10.5% over fiscal ’24. In-line with our guidance in FY ’25, Bank held 100% compliance in PSM and all of its subcategories, which resulted in notable reduction of RIDS and other deposits to 8.7% of total assets against 11% as at the end of FY ’24. The bank continues to create gradual increase in its organic accretion of PSL across sub-categories. Moreover, during FY ’25, the bank has also sold excess PSL across, micro and agri subcategories which resulted in an income of INR79 crores. The appropriate sale of excess PSL is expected to also lower the compliance burden for next year.
Going-forward, the bank remains well on-track to reduce these deposit balances well below 5% by fiscal ’27. As regards to non-interest income, the bank saw continued momentum across all diverse and granular fee income streams. Over the last two years, the Bank has seen a meaningful increase in its non-interest income to average assets, which has increased from 1.1% in FY ’23 to 1.4% in FY ’25.
Cost-to-income ratio has improved to 71.3 from 74.4% in FY ’24. The decline has been in-line with our broad guidance to gradually keep bringing down our cost-to-income ratio and we expect the momentum to continue. For FY ’25, the Bank had pre-provisioning operating profit of INR4,254 crores, which has grown 25.6% Y-o-Y. PPOC as a percentage to average total assets has improved to 1% against 0.9 for fiscal ’24.
Moving over to Asset quality highlights. We ended FY ’25 with a gross NPA and net NPA ratio and net NPA ratio of 1.6% and 0.3% respectively, the best-ever since March ’20 quarter. Further, provision coverage ratio has been further accepted to 79.7% against 71.2% last quarter and 66.6% in-quarter four. Including technical write-offs, PCR now stand at 87.6 against 82.4 in-quarter three and 79.3 in-quarter four last year. The resolution momentum remained strong. The bank had total recoveries and upgrades of INR5,923 crores in FY ’25, which was ahead of our guidance of INR5,000 crores. We have made 100% provision on the outstanding security receipt and as a result of that, the net carry value of SR as percentage of our advances are now mill. Cross slippage has come in at INR5,090 crores against INR5,334 in FY ’24. And as a result, slippage ratio has improved to 2.1% against 2.3 in FY ’24. Also sequentially, a marginal improvement has been seen in the overall as well as in the retail slippages. Moving over to balance sheet and other key highlights. Regarding advances in deposits, though the headline growth was moderate by design, it was anchored around our strategy of profitable growth. However, the underlying and the quality of both advances as well as deposits continues to be good and broadly in-line with our desired mix. If speaking particularly on deposits, the bank continues to focus on quality, granularity and cost. Just to call-out, our cost of deposits has remained largely around 6% over the last six consecutive quarters. And with our recent rate curve, we expect it to further improve going-forward. For full-year and quarter ended 31st FY ’25, the CASA ratio came in at 34.3 as compared to 33.1% in-quarter three and 30.9 in-quarter four. During the year, Bank added 1.3 million new CASA accounts and we’ve also opened 37 new branches in CASA cluster. At the CD ratio sequentially further improved to 86.5 against 88.3 in-quarter three. In-quarter four, the average quarterly LCR remained healthy at 125%. Regarding our capital position, the CEC and the overall capital stand at 13.5% and 15.6% respectively. Now talking of some of the other business highlights, we got authorized by Government of India for collection of GST as well as direct and indirect taxes. Bank has already gone live with GST collection for both customers as well as and we would go-live for commission of the direct as well as indirect taxes during the current quarter. Another notable highlight was that the bank was ranked highest amongst Indian banks in S&P Global and CDP raised rating for ESG and climate disclosure. This is the third year in a row of the bank. Lastly, we see good traction in new user registration as well as monthly active users in newly-launched payment solutions, which are Yespay and Yespay next year. Before taking your questions, I would like to reemphasize that has bank’s strategy and actions are fully anchored around improving its overall positioning and profitability. Towards that, a lot of work has already been put into motion on several underlying themes, which is expected to fully play-out in the coming quarters. Some of these key initiatives and the underlying trend are briefly captured on Page 22 of our investor presentation. I took a to bank’s core franchise has gained significant momentum and is quite well-placed to continue to and the Bank remains disciplined and focused on its execution. Once again, thank you so much for your continued support and now we can take your questions. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.The first question is from the line of Dev Day from Horse Power Securities. Please go-ahead.
Dev
Good afternoon, gentlemen and congratulations to the management team for delivering such as excellent result in this quarter. Thank you so much. Yes my question is regarding is you interested NII trajectory from here on do you project that the NII would grow at what rate and are you going to lag behind your peers in respect of the want of capital and NII growth because I’d like to highlight that one of your competitor has been planning to reach INR7,500 crores to tap the growth opportunity — upcoming growth opportunity. What would be your plan to counter that and have the upcoming growth opportunity? Because your NII are you are not growing as expected by the investors?
Prashant Kumar
So I think there are two-parts of your question. One in terms of the growth on the NII side and the second in terms of the capital requirement for the future growth of the business. So correctly, our core capital, which is PEC1 is 13.5% and this capital is sufficient to take care of our growth aspiration for the current financial year. We would continue to explore the requirement of capital if we find more opportunity for the growth going-forward. But as of now, this is education take care of our new destination.
Dev
I mean for upcoming years, what is your projected loan book figure? I mean, it’s currently saying INR2.46 lakh crores. I mean winning two-to-one to two years, what is the projected figure that you are working on? I mean, have any internal target that it may be to INR3 crores or 3.5 or less than that, what would be that?
Prashant Kumar
So I think this is what I was sharing earlier also. And we would be targeting a loan growth between, say, around 12% to 15%. And again, this would depend on the — upon opportunity which is available in the market due to various developments which happen domestically as well as globally, right? But I think this would be the range. And for this range of growth, this capital is sufficient. That is one point which I was making.
Coming to the part in terms of NII growth, I think you must-have seen that because of the tighter liquidity position and lot of competition in the market on the loan side, I think everybody would see a pressure on the NII growth. In this kind of scenario, our NII growth we think is quite reasonable. And once the loan growth will start moving up, especially coming from the retail segment, we would also see better growth Growth on the NII side also.
Dev
Gentlemen, my last question. In previous quarters, you excessed your interest to venture into the microfinance segment, right? Are you still interested?
Prashant Kumar
No, no, no, I think you must-have seen like what is happening in the microfinance as you say? Yes. Last-time also I mentioned maybe there are headwinds in this sector, but business per se remain position and if we get some good opportunity for any organic growth, we will definitely examine.
Dev
Okay. But are you still lending to those institutions who are lending directly to the microfinance units? I mean.
Prashant Kumar
Again, it depends like we are absolutely keeping a very close watch on like what is happening in the. And definitely when these type of headwinds are there, you become more selective. It is not like you stop it, but you become more selective. So I think we keep that kind of cautious approval for financing.
Dev
And whatever the stake sale, is it put in the back-burner or still you are exploring the option? I mean, those financial investors, are they still exploring the options or are they want to stick to their holdings?
Prashant Kumar
So I think you are asking your question from the wrong person, okay, because we don’t have any stake. We only have a stake in the US Securities and we don’t intend to sell our stake.
Operator
Sorry to interrupt, sir. I would request you to rejoin the queue for your follow-up questions. Thank you. In order to ensure that the management is able to address questions from all the participants, please limit your question to two per participant. If you have a follow-up question, I would request you to rejoin the queue. The next question is from the line of Harsh Modi from JPMorgan. Please go-ahead.
Harsh Modi
Hi, thanks for taking my question. I just wanted to understand the path of your NIM over next three to four quarters. So as we get a rate cut cycle and JPMorgan forecast is for another 100 basis-points from here. How do we think about your strategy? Would you try to gain more market-share on deposits in this rate cut environment or would you prefer to deliver slightly better NIM for over next three to four quarters? So if you could just detail the path of net interest margin and bank strategy to manage NIM, that would be great. That’s all my question. Thank you.
Niranjan Banodkar
Thank you. So, Harsh, I think absolutely are right in terms of — we have already seen a 50 basis-point rate cut and we expect a further rate cut in the current financial year. I think in this backdrop, we have also taken a call-in terms of reducing the rate of interest on both saving Bank as well as on the term deposit side, okay. So one of lever in terms of protecting and improving our margins is by reducing the cost of the deposits.
The second part is in terms of that going-forward, we are going to see a reasonable growth in our retail assets, which gives a better ease on the asset side. And we would like to keep that proportion of retail and SME at around 60% and definitely the retail assets gives you better yield than the corporate side. We will continue to do this part. The third-part in terms of managing the margins, which was earlier this was our non-compliance on the PSL, okay. Now because of non-compliance on the PSL, almost 11% of our assets were there in the RIDS where the yields are very low. We have already seen that 11% coming down to 8.7% at the end of FY ’25. And we would be seeing for the next eight quarter this 8.7% coming down to less than 5% to the assets. So I think these three factors in terms of continuing to reduce the cost of deposits by reducing rate of interest, improving the proportion of the current account.
Prashant Kumar
Our theme in terms of going for those asset classes where the margins are good, protect the margins, continue to focus on the profitable growth. I think your question was more in terms of whether we would like to garner than just the market-share, but I think our focus has been on profitable growth and the PSL part has been taken here. So I think with these three levers, we would be — we are quite hopeful that not only we will be able to protect, but we will be able to improve margins going-forward., would you like to add?
Niranjan Banodkar
No, I think — and I think Prashant has covered this well in terms of the levers that we’re looking at. But as I think you rightly pointed out, in a falling interest-rate scenario, you will, of course go through the lease and lags on timing the advances repricing versus the term deposit repricing, right? So the way at least we are approaching the structure of margins is that at the core level, — we will want to protect the spreads between our term deposit rates and the loan yields. I think that’s the spread that we will want to protect.
Of course, we acknowledge that there will be a timing difference that could play-out in this period. And therefore, one-way to mitigate that is to see how we can improve the mix of CASA because that kind of protects the spreads in the interim. And second is to see if we can reprice the SAF pricing on the stock, which Krashant has spoken. Now that’s really on the — on just the core loan spread structure. I think we will — we are confident that know, as we kind of go through of, let’s say, a three to four-quarter cycle, we believe we should come on the higher of margins in this period, but it will go through a over-time period.
The second — the second part is, which is also playing out for us is we are now also beginning to see our slippages trend better and that also means that the interest accruals that we were forgoing last year will also begin to now showcase in the in the earnings and therefore the margin. So that’s also another lever that we believe will play to our advantage as compared to the last couple of years. And of course, I think Prashant has already mentioned about how our IDF balances will continue to help us margins.
But having said all of this, we also acknowledge that especially on the — in the non-retail segment, we’ve also seen that there is intense competition and there is — I mean, there are also quite thin margins that we do see intent competition happening there. So we will continue to make sure that we operate within our profitability threshold, but at the same time acknowledge that it is — it is a very tight market in that space. I hope this clarifies the question you had in your mind. Thank you.
Harsh Modi
Yeah. Thanks for that explanation. So that I get it right, basically due to the leads and lags, there is a risk of some degree of NIM pressure over next couple of quarters, but given the levers that you spoke about, three to four quarters out, we should ultimately get higher NIM. Is that — is my understanding correct?
Niranjan Banodkar
That’s correct. And even in the interim, the mitigants will be through — as Prashant said, the mitigants will also be through a repricing of the entire, let’s say, star book, those will also aid cushion any impact on that kind of come through a lag — lag transition of deposit pricing.
Harsh Modi
Got it. Got it. Thanks. And one more question if I may, is on asset quality. As you said, there is improvement, but there’s mass change in some of the global growth outcome. And would you — not today, but let’s say, six months hence, expect any weakness in any sort of trade supply-chain, any sort of SME book, any kind of retail book because there are some, let’s say, IT companies talking about not increase in salary right away and so on. So as you think about early warnings over the next three, six, 12 months, are there any things that you suggest we should be more focused on? Thank you.
Prashant Kumar
We are not seeing currently any such thing, okay, where the weakness in either of the sectors of the portfolio are being observed. Actually, we are seeing a reverse end where we are seeing Improvement in different sectors like the retail side, we have seen the retail credit cost has been plateaued in-quarter two, three, and we are seeing improvement in-quarter four. On the unsecured and credit card side, we are also seeing that plateau to happen. And we have seen a very good behavior from our SME and end-market customers. So I think currently, we don’t see any such a signal in any such part where there is an issue around it. But definitely, because of whatever is happening on the overall global side, we have to be very worthful and cautious and we are closely monitoring all the sectors.
Harsh Modi
Thank you so much.
Operator
Thank you. Thank you. The next question is from the line of Jay Mundhra from ICICI Securities. Please go-ahead.
Jai Mundhra
Yeah, hi, sir, good evening and thanks for the opportunity. Thank you. Sir, first question on just on this continuation of this net interest margin. So if you can quantify the share of maybe the fixed-rate book and EBLR and the NCL linked loans and what would be the blended cost of savings account as of March 20 — March ’25?
Niranjan Banodkar
So Jai, the floating-rate book that we have is about two-thirds of our loan book, right? Right. It’s a combination of repo and also some of them will be linked to T-bills as well. So that’s — that’s the first part. The second is you had a question on the savings account blended rate. We have about blended rate of 5.7% to 5.8%. I think that’s the range in which it is topping on the entire savings — savings account.
Jai Mundhra
Right. And how do you look at savings rate? I think as of now, we are still offering 7% plus on balances above INR10 lakhs. A lot of peers have cut the savings rate up to 50 and maybe above 50 lakhs balance. And your savings growth so-far has been superior. How do you see the savings that you offer right now? Is there any further scoop to cut or you would like to see behavior of this cut at least in the medium-term and then we would like to have a relook.
Niranjan Banodkar
So they have already taken a decision in terms of reducing rate of interest on the side, which would be implemented from Monday. So after INR10 lakh, the revised rate would be 3% and between 10 lakh to 25 lakh, this would be 3.5 between 25 to 59, this would be 4% and more than 50 lakh, this would be 5%.
Jai Mundhra
Okay, sure. Sorry. So I was not bad about this. Okay. So that is good. And secondly, you this year, we had a good recovery of more than what we had estimated at the beginning of the year. So we did I think INR5,900 crores recovery. If you can ballpark help us and what is the kind of recovery that you are expecting this year? And within that, how much could be from security receipts because now that the balance is nil, anything that comes from that portfolio ideally should directly go to other income, right? Is that the accounting right? And how do you look at the overall recovery in HR recovery?
Niranjan Banodkar
No, I think the past like we have made 100% provision on the security receipt and everything which would come would add to our profit. But in the terms of accounting, it will not add to the other income and it actually takes care of the provisioning part, okay. That is one sure.
The second thing like since now we are having a 0.3% net NPA, okay. And the stock of the NPAs from the recoveries are made is also coming down. And since now the pool has also come down, okay. And there it will take a more effort in last year to get taken little longer time. We are expecting something around INR1,000 crores of recovery coming from the security receipt during the current financial year and another INR2,000 crores from the assets which are either written-off or which are the NPA pool within the. overall around.
Jai Mundhra
Okay, sure. Sure, sir. And restructured loans, sir, they have declined very sharply from INR1,900 crores to INR400 crores. I think you have mentioned that it is primarily due to repayment. Is there any sector-specific thing or you have seen some one-off or you know if you have any more color there?
Niranjan Banodkar
So this is with respect to a refinancing that happened on one of the hospitality sector exposures that we had. Of course, this went went through any structure, but we are not fully repaid on that experience.
Jai Mundhra
Sure. And last question, sir, I think in the media, there have been lot of few reports of layoff in the retail asset division of the bank. The retail business, as you had also mentioned that the bank is now focusing more on profitability, cut-down or scaled back some of the PLCC and some of those growth. And if you like to comment, you know, how are you looking at — I mean, in the layoff situation, have you done that? Is that process over? Was there any change in the way you were doing retail businesses and apart from what you mentioned in terms of profitable growth. Thank you.
Prashant Kumar
So, Jay, I think the first clarification which I would like to give is that this restructuring or the consolidation of the businesses that have not been done only in retail, it has been done across the bank, which includes wholesale as well as retail. And while we have done this consolidation or restructuring, because in the life stages of all the organization, you continue to prepare yourself for the future business plan of the bank.
So I think we — for the next five-year business strategy, we were thinking in terms of how to convert different businesses for better solutions to customers, better efficiencies and also in terms of the very focused business growth by the different business vertical so what fundamentally we have done, on the retail liability side, we have converged two businesses, two different business line into the branch banking because going-forward in our business strategy, the branches would be the fulcrum for acquisition of customers as well as in terms of servicing the customer, okay. That is one part which is.
The second part is currently the SME business, which falls under retail actually consists of different I would be saying the customers. One is like a micro SME, okay, which is mostly done by the branch banking. Then you have a medium enterprise, you have a small enterprise business. What we have done that on the micro side, which is handled by the branch banking has been consolidated with the branch banking, whereas the medium enterprise and the small enterprise, which actually aligns more with the mid-market, okay. So we have done a consolidation between the mid, small enterprise and the medium enterprise as a commercial banking business segment which would report into the executive direction on the wholesale side.
I think these are the two fundamental things which we have done. We have also merged the financial institution group, like is international financial institution group are sitting separately in domestic separately. We have consolidated that position. Similarly, on the wholesale side, two different business units, which is the multinational corporation and the start-up segment have been together. So the entire exercise was more in terms of a business consolidation for giving a — or outreach to customers by a single business unit. This has been done to take care of our business strategy or the requirement for the next five years. So that’s why this exercise has already been done and keeping in view a very, very long-term business strategy of the bank, but definitely in all the organization, you continue to review. You continue to see how you can further improve the efficiency, but I think largely it has been there.
Jai Mundhra
Right. Thank you so much, sir. Thanks. Thanks and all the very best.
Operator
Thank. The next question is from the line of Sumit from Morgan Stanley. Please go-ahead.
Sumeet Kariwala
Hi, Prashant. Hi,. One is, very good, sir. So just wanted to check. One, did you mention that two-third of your loan book is linked to repo and T-bills? It is floating-rate, it’s the external benchmark. Not all of it will be — but yes, bulk of it will be repo and. So how much is MCLR in that please?
Prashant Kumar
MCLR is a single-digit number.
Sumeet Kariwala
Okay, got it. And the second question was with respect to recoveries. So you mentioned INR20 billion from written-off pool and NPL pool. Can you quantify the written-off pool as the quantum of recoveries from written-off pool?
Prashant Kumar
No, I think Sumit, the one portion is definitely the security receipt where 100% provisions have been made. We are expecting something around INR10 — INR10 billion, which is INR1,000 crores from that pool. Now remaining INR20 billion would be from the pool of the — mostly the retail side, which includes both completely written-off as well as the NPA pool. It will be coming more from say written-off pool because our net NPA has around to 0.3%.
Sumeet Kariwala
Very clear, sir. And there is a meaningful cut in savings deposit rates. Broadly, other things remaining the same, how much would cost of deposits come down by because of that?
Niranjan Banodkar
So we are expecting overall cost of deposits to be lower by approximately 20 basis-points.
Sumeet Kariwala
Overall, yeah, this is just because of SAR deposit cut.
Niranjan Banodkar
It’s hard about it. But Sumit, I would encourage that we should not anchor that for any immediate impact standpoint because like I was mentioning in my earlier conversation, the way this cycle will play-out is you would have immediate impacts coming in, let’s say, on the loan book. The deposit book will — when I say deposit, the term deposit book repricing will take its own time and with some lag. And therefore, this cut kind of allows you to offset the interim, let’s say, deficit that you might have, but the point I was making is assuming that there are no more rate cuts, let’s hypothetically take that case. But over a three to four-quarter as you exit, as a combination of this, you should have been coming on the positive.
Sumeet Kariwala
Okay. So XRIDF, your margin would logically be slightly down over a four-quarter period. XRIDF right?
Niranjan Banodkar
No, no, Sumit, again, I’m clarifying and that’s not what I’m saying. On — if I — if I take the full impact of cost of deposit, including the staff, I’m not saying that we will — we will compress margins. So to just answer bluntly, the rate of is also to enable that we should not have any compression because of the immediate repricing of loans.
Sumeet Kariwala
Got it. And last question, sir, you mentioned multiple drivers for margin improvement over a two-year period. I just wanted to get an idea on the loan mix as well. Will that be a positive shift?
Prashant Kumar
No, I think on the loan mix, especially, I think it will remain in the range of that 60 to 40, like six months would be retail and SME and 40 corporate and other. The only thing would be like the 60% on the retail, which is exactly like almost like 43 pure retail, which was not growing in the last financial year, we would be seeing a growth of 10% to 12% where the margins are better as compared to the other parts.
But the whole mix on the loan side is not always keeping in due the yield, but also it’s a diversification of risk, right? Which actually is now helping us like there was a problem on the retail and the corporate is helping us. Earlier when there was a problem on the corporate retail was helping. So I think this diversification of book gives you advantage both on the risk side as well as on the return.
Sumeet Kariwala
Thanks. Thanks Ranjan for asking — for answering those questions. Thanks a lot.
Prashant Kumar
Thank you.
Niranjan Banodkar
Thank you okay, just want to check if they are still on the call okay okay, but sorry I’m not sure if do we have the operator online? Do we have the operator online? I think the call is on. Yes, looks like yes, can you bear with us please t looks like with some technical glitch
Operator
The next question is from the line of Raj Kumar who is an individual that we do not answer from the current participants, we will move on to the next participant. The next question is from the line of Kumar as an Individual Investor. Please go-ahead
Niranjan Banodkar
Yeah, just check. I think there is some I don’t know if it’s an issue with us, but we are not able to hear the other side clearly, including the operator. You know, when he spoke we were not able to hear me clearly can you hear me? Yeah, I can hear. Yes, this part I could hear you well.
Operator
Sure. Sure, sir. We’ll take the next question. The next question is from the line of Singh, who is an Individual Investor. Please go-ahead.
Unidentified Participant
Hello. Am I audible?
Operator
Yes, sir, you’re audible. Please proceed.
Unidentified Participant
Okay. I have two questions. First question is regarding the retail banking. Our losses from retail banking has increased quarter-on-quarter by around 50%. So how are you trying to — when will we see some profits in this division? And second is, regarding the loans from retailer, how much percent percentage of total returns, retail loans are you getting from the branches,, big branches and from other party also, third-party venture.
Niranjan Banodkar
So this is your engine. Yes, can you hear me, sir? Okay. This is. So sir, first question was on the increase in the retail losses. So as you would have — you would have seen — sorry, I said some background noises. You can please go on-mute. If you see in our results, we have also said that our PCR in this quarter has increased from 71% in December to 79.7% as of March. The increase in PCR in itself, if you just put on a number, translates to in excess of INR300 crores of provisioning. And that largely if you ascribe to the retail business, just in terms of intention of increasing the PCR is resulting into the increase in the — in the loss from that particular unit. That’s number-one.
Number two, I also want to take the opportunity to also state that what you see as part of the segmental results is a regulatory requirement under which we define Certain exposures basis the regulatory destination. However, when we look at definition of retail from internal segmentation, there are other elements of revenues that also get mapped. And just for example, within the segmental results that you’ll see, there is another income line where you might have some third-party distribution where the income gets mapped, but it’s not shown as part of retail. But having said that, we do acknowledge that in retail, just given the way our the losses — credit losses have out over the last 12 to 18 months, there has been a drag. But if you look at the performance purely from an operating profit perspective, I think we do see very strong and encouraging signs from the retail business. I think the last point I wanted to make on segmenting, which you would appreciate, sir, is that the retail also includes liabilities and liability business is a capital-intensive business with cost-to-income which are higher than other businesses because it involves investments in branches, people and those costs effectively also get reflected in the retail business. So as we start seeing a normalization of credit losses as we start seeing growth coming back on our retail assets. And as we start seeing operating leverage on our branches playing out, we are confident and that we will be able to deliver profits on the — on the retail segment as well. Your second question was on — I think the question was on loans from retail. What is — what is the proportion from what we do internally and what is that we do from DSS if that was the question. So we have we have very consciously been increasing the share of retail sourcing of from our branches. And that about two years back was 37% of our entire disbursements is actually now touched 50% as we go in this year. Our intent is to keep you increasing that share. The reason I also wanted to state is why some of the sourcing was not much higher on day-one is also because there are — I mean, there are two-ways of looking at driving retail. One is you can wait for a strong liability and a large customer-base is franchise to get built-out and then you can use assets to cross-sell, but it takes time. It will have its own ways of reaching scale. The other — other is to say I can also have a separate acquisition engine on retail assets. And as the book builds, I can now start moving towards more internal sourcing because — because the franchise is also growing in size and scale. And I think you are seeing that play-out in our instance where the internal sourcing proportions are going up because we are now having a much larger set of customers to deal with as compared to what we had about, let’s say, four or five years back. I hope that answers the question.
Unidentified Participant
Okay. Okay. I have one follow-up question.
Niranjan Banodkar
Yes, why?
Unidentified Participant
Yeah, I’m just asking the retain loans or sorry, retail losses, have they peaked in this quarter or are you saying that they could increase further from here on in the coming quarters.
Niranjan Banodkar
So our expectation is that retail losses have peaked and we should not see an increase of retail losses coming up.
Unidentified Participant
Okay. Okay. Thank you very much.
Operator
Thank you. The next question is from the line of Srinivas, who is an Individual investor. Please go-ahead.
Unidentified Participant
Yeah, good afternoon. Am I audible?
Prashant Kumar
Yes, you are.
Unidentified Participant
My question is regarding the key drivers which will impact the bottom-line of the bank. This year we have made a full-profit for the entire FY ’25, which is INR2,406 crores. So INR2,406 crore, I mean if this has to increase substantially, I mean I can see at least three metrics which should really fall in-line. One is the ROA, the other is the NIM and the other is the total, I mean asset-base. Asset-base also should be increasing. Actually, if we see the last five years, like since FY ’20, there has been substantial increase year-on-year in the total assets of the bank. But in the current FY ’25, as you compare it with FY ’24, the growth rate is quite low as compared to the previous years. So what is the guidance for the total asset-base growth rate over the next five years and also NIM and the ROA over the next five years?
Niranjan Banodkar
So no, sir, thank you for thank you for the inputs that you’ve given us. When we look at the NIM and ROA target, we have stated this publicly earlier as well. We are — we are confident that we will as a bank deliver a 1% ROA for fiscal ’27 in excess of 1%, just to be precise. And we will also deliver a target of 1.5% ROA by either fiscal ’29 or fiscal 30. So we are very confident of delivering both these targets.
Now our ability to drive those targets predominantly will come in from the expansion of the net interest margin, which is currently at 2.5% exit for March ’25, full-year was about 2.4%. And we have very clearly identified drivers that are going to contribute towards expansion of the net interest margin from a 2.4% in excess of, let’s say, 3.2% in excess of 3.5%. So clearly, net interest margins, I would say is the number-one driver for expansion of. That’s number-one.
Number two, of course, as a bank, as we scale, we do also believe that we will continue to be very frugal and optimal on our cost structure. I would say a lot more as of now where we are very prudent and in many ways you can say surgical on costs and that will also result into cost to assets improving over the next three to five years. Will that be a dominant part of the contribute — contribution to the RO expansion, not necessarily, but it will be one of the contributors.
Our Phase-2 asset, we have been doing quite well actually over the last over the last, I would say, say a year, year and a half, and I think it’s already now expanded to about 1.4%. We don’t expect that each two assets will expand by a much material number. We might see another 10 to 20 basis-points of expansion in these two assets. But like I said, it is the net interest margin that will drive ultimately the ROA expansion. Now as the NIM expands, clearly, we are going to see the benefit come through on the NII growth as well, which should therefore be faster than the asset growth that we have.
On the assets, Prashant did mention earlier, we do expect that the assets should be growing — the advances rather — pardon me, should be growing in the range of 12% to 15%. However, over the next three years, we also expect that the RIDF balances will come down. So to that extent, the total assets will actually grow slower than the 12% to 15% margin. But yeah, I think that’s largely a direction with which we operate.
Unidentified Participant
Okay, thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr Prashant Kumar for closing comments.
Prashant Kumar
Again, thank you everyone for taking his keen interest in joining this earnings call. I think the Bank has been able to consistently deliver the assurances which has been given to the stakeholders and we are quite confident that going-forward, we would be moving in terms of meeting our business objectives. And also in terms of the profitability target. So thank you so much for your support and the team. Thank you.
Operator
Thank you. Please bring the conference call to NN. On behalf of Yes Bank, we thank you all for joining us. You may now disconnect your line