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Informist, Saturday, Apr. 19, 2025

 

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--YES Bank MD: Will endeavour to keep deposit balance below 5% by FY27 
--CONTEXT: Comments by YES Bank mgmt in analyst call post Jan-Mar earnings 
--YES Bank MD: Expect cost of deposits to improve after RBI rate cut 
--YES Bank MD: See loan growth of 12-15% in FY26 
--YES Bank MD: See deposit growth higher than 12-15% in FY26 
--YES Bank MD: Hopeful, confident that margins will improve in FY26 
--YES Bank MD: Aim to maintain credit-deposit ratio around 85% in FY26 
--YES Bank MD: Expect improvement in cost-to-income ratio in FY26 
--YES Bank MD: Plan to open 400 branches over next 5 years 
 

 

MUMBAI – YES Bank expects the rate of deposit growth to be slightly higher than advances in 2025-26 (Apr-Mar), Managing Director and Chief Executive Officer Prashant Kumar said in post-earnings press conference Saturday. "I think we would be targeting a loan growth of 12-15%, depending on how the macroeconomic situation will play out, and we would like to see that our deposit growth would be slightly higher than the loan growth," Kumar said.

 

Earnings released Saturday showed the bank's advances grew 8.1% to INR 2.46 trillion as on Mar. 31, faster than the deposit growth of 6.8%. The deposits were at INR 2.85 trillion as on Mar. 31. YES Bank's net profit surged in the Jan-Mar quarter due to a sharp fall in provisions. The bank's net profit rose 63.3% on year to INR 7.4 billion, beating analysts' estimate of INR 6.26 billion. Sequentially, the net profit was up 20.6%. The bank's net profit for the financial year 2024-25 (Apr-Mar) was INR 24.06 billion, almost double that of INR 12.51 billion reported the previous year.

 

Kumar said the bank expects its cost of deposits to improve after the 25 basis-point rate cut by the Reserve Bank of India earlier this month. For the last six quarters, the bank has maintained its cost of deposits in a range of 6.0-6.1%, and Kumar expects it to improve further.

 

The bank is looking to maintain a credit-deposit ratio of around 85% in FY26, close to the credit-deposit ratio of 86.5% in Jan-Mar, which rose slightly from last year but was down from 88.3% in Oct-Dec.

 

Kumar expects the bank's margins to improve in FY26. He said the bank is very selective in offering products, taking into account their contribution to margins. The bank's net interest margin was 2.5% in Jan-Mar, up from 2.4% in the preceding quarter. 

 

"Because we are focussed on a profitable growth, so the products which don't contribute to the margins, we are not disbursing," Kumar said. "We have been very, very selective. That we have seen in case of retail. Even on the corporate side we are not going ahead with those kind of exposures where the margins are very thin, where the pricing is very competitive."

 

The bank's cost to income ratio was 67.3% in Jan-Mar, down from 71.1% in the earlier quarter. Kumar said the bank aims at improving the cost to income further, without disclosing the target. He said, "we are very clear about one single goal is to achieve 1% ROA (return on assets) and the cost to income would also be one of the components to achieve that cost."

 

On scaling up business, Kumar said the bank plans to open 400 branches over the next five years. Kumar said the bank aims to maintain the deposit balance below 5% by FY27. Shares of YES Bank on Thursday closed 1.2% higher at INR 18.09 on the National Stock Exchange. Financial markets were closed on Friday for Good Friday.  End

 

Reported by Sourabh Kumar and Priyasmita Dutta

Edited by Ashish Shirke

 

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