Yes Bank conducted a concall on 24 July 2023 to discuss the financial results for the quarter ended June 2023 and prospects of the bank. Prashant Kumar, MD&CEO of the bank addressed the call:

Highlights:

The bank has recorded strong growth in the core fee income, while containing the operating and the credit cost.

The bank has launched refreshed brand identity with vibrant new logo. This is expected to instill confidence into the stakeholders and also raise the pace of customer acquisition.

The bank credit grew by 10% adjusting for the ARC sales. The retail advances have increased by 21%, MSME 24%, mid-corporate 29% end June 2023. The corporate advances have further declined in Q1FY2024.

The non fund based exposure has increased 12% yoy and 4% on sequential basis end June 2023.

The bank expected the growth momentum to continue going forward. The bank is focused on accelerating the profitability and growth momentum in the near term.

The deposits and excluding CDs have increased by 15%. The credit deposit ratio has reduced to 91.3% from 92% a quarter ago. Within the deposit, the retail deposits have increased 23%.

The bank has witnessed decline in margin mainly on account of deposits repricing.

The cost to asset ratio has remained a stable at 2.6% over last 6 quarters.

The slippages in the large corporate segment were on account of one large account. The overdue accounts in 30-90 days have reduced by Rs 1000 crore in Q1FY2024.

The resolution momentum continued with recovery and upgradations of Rs 1201 crore in Q1FY2024.

The bank is focusing on raising CASA deposit ratio, reducing drag from PSL requirement, improving cross sale and strict control on operating and credit cost.

The bank has added 90% of the saving account and 55% of the individual current accounts in digital mode.

Bank has bought PSL certificates of Rs 4300 crore in Q1FY2024.

The bank is looking for inorganic growth in the microfinance segment to reduce for the drag from the PSL of 30 bps and the inorganic acquisition is expected to help in meeting the PSL.

The pending repricing of term deposit stands at 20 bps which would have a 5-10bps impact on the net interest margin. But the bank is also focused on lending to the high yield segment which would help to protect the margins. The bank does not expect any further reduction in the net interest margins.

The bank has added 29 branches and 1000 staff in Q1FY24. The bank is planning to add 150 branches in FY2024. It would also add another 500 employees in the rest of the Year.

About 57% of the loan book of the bank is on a floating rate basis of which MCLR linked is 18% and the repo linked is 26%. Further 10% of the loan book is a short term loan book.

The entire loan book in the restructured category is out of the moratorium.

The bank expects credit cost at 40-50 bps.

The RIDF deposits account for 8-9% of the balance sheet.

The bank is focusing that from FY24 onwards there will not be any incremental requirement of the RIDF deposits as it wants meet PSL requirements on its own.

The bank is targeting loan growth of 15 to 20% and the deposit growth of over 20% for FY2024.

The bank aims to reduce credit-deposit ratio below 90% by March 2024.