YES Bank shares jump 9% on robust Q4, asset quality improvement

Shares of YES Bank rose nearly 9% in opening trade on Monday after the private sector lender reported better than expected earnings in the fourth quarter ended March 31, 2024. Extending gains for the third straight session, YES Bank shares opened at ₹27.52, up 5% against Friday’s closing price of ₹26.15 on the BSE. In the early trade, the banking stock gained as much as 9% to 28.50, while the market capitaliasation rose to 79,630 crore.

YES Bank shares have risen in six out of the last seven sessions and climbed nearly 19% during this period. The stock touched its 52-week high of ₹32.81 on February 9, 2024, and its 52-week low of ₹14.10 on October 23, 2023.

The largecap stock has given 74% return to its shareholders in the last one year; 74.5% in six months; and 23% in the calendar year 2024. In the past one month, the stock added nearly 14%, while it gained 7% in a week.

For the fourth quarter ended March 2024, YES Bank reported net profit of ₹452 crore, up 123.2% against ₹202 crore in the same period last year. Sequentially, the profit was up 95.2% from ₹231 crore in the December quarter of FY24.

The net interest income (NII) grew 2.3% to ₹2,153 crore in Q4 FY24 as compared to ₹2,105 crore in the corresponding period last year. On quarter-on-quarter, the NII rose 6.8% from ₹2,017 crore in Q3 FY24. The non-interest income was up 56.3% YoY and 31.3% QoQ at ₹1,569 crore during the quarter under review. The total income climbed to ₹3,722 crore in March quarter of FY24, up 19.7% YoY and 15.9% QoQ.

On the asset quality front, the gross non-performing assets (GNPAs) improved to 1.7% from 2% in Q3 FY24 and 2.2% in Q4 FY23. In a similar trend, the net non-performing assets (NNPAs) also declined to 0.6% from 0.9% in the previous quarter and 0.8% in the same period last year. The provision cost (non-tax) was at ₹471 crore for Q4 FY24, down 23.8% YoY and 15.1% QoQ.

“This quarter demonstrates a significant step in the return on assets (ROA) expansion journey, with Q4 FY24 RoA expanding to 0.5%. This is despite the one-off gains from tax refunds, SR recoveries and ARC Sale, being prudently utilised for strengthening the asset quality metrics- for instance, the NNPA + Net Carrying value of SRs have more than halved over the year to 1.1% from 2.4% in FY23,” says Prashant Kumar, Managing Director & CEO, YES Bank.

“We continue to witness strong momentum in our liability franchise with growth in deposits expanding to over 20% Y-o-Y for the first time in the last 8 quarters. Importantly, despite the challenging environment during the year, our CASA ratio has expanded 10 bps YoY to 30.9%,” he adds.

The balance sheet of the bank crossed 4 lakh crore during the March quarter, drive by deposit accretion (up 22.5% YoY and 10.1% Q-o-Q) and net advances growth (ex-reverse repo) at 13.8% YoY, aided by sustained growth momentum in SME and Mid corporate advances (at 25%+ YoY) and resumption of growth in corporate segment, the bank says in its earnings report.

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