Yes Bank Q1 Results: Profit Beat Estimates, Asset Quality Improved

Yes Bank reported its Q1 earnings and earnings were above expectations. The share price of Yes Bank was Rs 14.05 per share on Tuesday morning.

Yes Bank Earnings Key highlights: 

• Net Profit: Rs 310.63 crore, up 50.17% year-on-year
• Net Interest Income: Rs 1,850 crore, up 32% year-on-year
• Gross NPA: Declined to 13.4%

Below are details from Yes Bank's quarterly results:

Yes Bank Q1 FY23 Earnings:  Profit beats estimates 

Yes Bank reported a net profit of Rs 310.63 crore in Q1FY23, up 50.17% from the year-ago period, beating street expectations. Analysts had earlier anticipated a profit of about Rs 275 crore. Sequentially, the profit was up from Rs 266 crore.

Yes Bank Q1 Results Net Interest Income Rises 

A bank’s main business is borrowing money from different sources and lending that money at a higher rate. The income the bank generates from this difference is known as net interest income. Net interest income for Yes Bank grew to Rs 1,850 crore, up 32% year-on-year (YoY). Net interest margin grew 30 bps on quarter to 2.4%.

Non-interest income (other income) for Q1FY23 stood at Rs 781 crore, down by 10.1% due to lower income from forex, debt capital markets, and securities segments.

Yes Bank Q1 Results: Asset quality improves 

The bank’s Gross NPA ratio stood at 13.4% compared with 15.6% in the April-June quarter, compared with 15.6% in Q1FY22 and 13.9% in Q4FY22. Net NPA ratio reduced 160 bps year on year to 4.2% and 30 bps sequentially.

Yes Bank Q1 Results: Provisions Fell 

Provisions for bad loans for the June quarter were at Rs 175 crore. It declined 62% year on year and 36% sequentially, aided by lower slippages that came in at Rs 1,072 crore against Rs 2,233 crore in the year-ago period. 

Yes Bank Q1 Results: Deposits Rise

 The Bank’s net advances at the end of the June quarter stood at Rs 1.86 lakh crore, a growth of around 3% on quarter and 14% year on year. The retail & corporate mix stood at 62% and 38%, respectively. The deposits increased by 18% year on year to Rs 1.93 lakh crore, with total balance sheet growth at 17% year on year.

Bank’s CASA (current and savings account) deposits now comprise 30.8% of total deposits of the bank compared to 27.4% in the Q1FY23. CASA capital is the cheapest source of capital for every bank. CASA continues to grow at nearly 2x the rate of overall deposits growth.

Yes Bank Q1 Results: Other Key highlights

 As per reports, nearly every third digital transaction that happens in India is powered by Yes Bank. Yes Bank signed a binding term sheet with JCF ARC LLC & JC Flowers Asset Reconstruction Company for a strategic partnership concerning the sale of identified stressed loans of the bank.

Yes Bank Q1 Results: Analysts' Review

ICICI Securities: The brokerage firm remains cognizant of risks arising from delay in resolution of the stress pool, modest RoE profile during the transition, and supply overhang post the expiry of lock-in shares. ICICI Securities maintained a HOLD rating on Yes Bank with a target price of Rs 14.7.

Nirmal Bang Institutional Equities: Though the loan mix improved and NIM continued to recover,  the brokerage has a SELL call on Yes Bank with a target price of Rs 13.4. It finds medium-term ROA targets unattractive given the investable opportunities available with larger banks.