Yes Bank Q4 net profit jumps over two-fold on improved margins, asset quality; higher costs weigh
Nalini Krishnan, Co-Founder, REACH, and Soumya Swaminathan, Chairperson, MSSRF, at a panel discussion organised by the Chennai International Centre on Saturday
more interdisciplinary research. Many private universities are entering these fields, but greater eorts are needed, beginning from schools and colleges,” she added.
Even though the budget for health research has increased, it remains a small fraction of the total health budget, which itself is only 1 per cent of GDP. This level of investment is inadequate considering the complexities of the health challenges we face. Currently, the majority of health research investment comes from the government, with little contribution from the private sector, she said.
However, “it was only during Covid, I think, for the first time, that some of our pharmaceutical companies actually engaged in serious R&D and were able to produce. Our pharmaceutical companies are mainly focussed
on generic manufacturing. Therefore, the technology is primarily about how to make aordable, quality drugs and vaccines, not about developing new products. But during Covid, I think they were challenged. The government also allocated funds, leading to the development of some new products in India,” said Swaminathan.
EFFECTIVE MESSAGING
Nalini Krishnan, FounderDirector of REACH, a nonprofit organisation working on tuberculosis for over two decades, praised Soumya Swaminathan’s global recognition, attributing it to her eective communication during the pandemic. She highlighted Swaminathan’s calm and science-based communication amidst the chaos of misinformation, making her a respected personality worldwide.
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 in SME and mid-corporate advances which rose 25 per cent on year, and resumption of growth in the corporate segment.
Deposits jumped 22.5 per cent yo-y and 10.1 per cent q-o-q to ₹2.7lakh crore. The 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 about 32 per cent, he said.
NII UP IN Q4
The net interest income (NII) increased 2.3 per cent y-o-y and 6.8 per cent q-o-q to ₹2,153 crore in Q4. The 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 improve by 80-100 bps over 2-3 years, the management said.
Executive Director Rajan Pental said the bank utilised one-o gains from tax refunds, SR recoveries and ARC sale to strengthen the asset quality and provisioning buer 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 saw increased spend on rise in the variable employee wage component, Pental said.
The bank said that retail slippages remain elevated, but moderated sequentially in Q4 and the bank is recalibrating the growth strategy towards high yielding products given that deposit rates remain elevated.
The 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. The net NPA ratio, at 0.6 per cent, was also better than 0.9 per cent in the previous quarter and 0.8 per cent a year ago.