YES Bank posted a net profit of ₹452 crore for Q4 FY24, up 123.2 per cent on year and 95.2 per cent on quarter, led by improvement in margins and asset quality. However, higher operating costs weighed on the bottomline.

Net Advances grew 12.1 per cent Y-o-Y and 4.7 per cent Q-o-Q to ₹2.3 lakh crore aided by sustained growth momentum in SME and mid-corporate advances which grew 25 per cent on year, and resumption of growth in the corporate segment.

Deposits grew 22.5 per cent Y-o-Y and 10.1 per cent Q-o-Q to ₹2.7 lakh crore. CASA ratio improved 120 bps sequentially and 10 bps on year to 30.9 per cent as of March 31.

In the earnings call, MD and CEO Prashant Kumar said the bank has always ensured that deposit growth is more than loan growth, in-line with which the bank is estimating deposit growth of 18.5 per cent and loan growth of 17 per cent in FY25.

Loan growth will primarily be driven SME and mid-segment loans which are expected to grow over 25 per cent, followed by retail and large corporate loans, both of which are expected to grow in high single digits. Retail and SME loans will continue to comprise around 62 per cent of total loans and large and mid corporate loans for about 32 per cent, he said.

Net interest income (NII) increased 2.3 per cent Y-o-Y and 6.8 per cent qoq to ₹2,153 crore in Q4. Net interest margin (NIM) stood at 2.4 per cent, flat on quarter but lower than 2.8 per cent a year ago. The combination of declining share of RIDF balances and improvement in retail assets in the product mix will ensure that margins for the bank improve by 80-100 bps over 2-3 years, the management said.

Executive Director Rajan Pental said that the bank utilised one-off gains from tax refunds, SR recoveries and ARC Sale to strengthen the asset quality and provisioning buffer to the extent of around ₹590 crore.

Operating costs for the quarter were ₹2,819 crore, up 27 per cent on year, of which costs to buy PSLCs to meet priority sector lending targets was ₹254 crore. In addition, the bank also saw increased costs due to increase in the variable employee wage component, Pental said.

The bank said that retail slippages remain elevated, they have moderated sequentially in Q4 and the bank is recalibrating the growth strategy towards high yielding products given that deposit rates remain elevated.

Gross NPA ratio improved to 1.7 per cent as of March 2024 from 2.0 per cent a quarter ago and 2.2 per cent a year ago. Net NPA ratio at 0.6 per cent, which was also better than 0.9 per cent in the previous quarter and 0.8 per cent in the previous year.