As Yes Bank prepares to unveil its Q4 FY2024 results, investors and market analysts are keenly awaiting insights into the bank’s financial health, asset quality, and growth trajectory. This comprehensive analysis explores critical expectations, historical performance, and factors influencing Yes Bank’s stock price ahead of this pivotal announcement.
Yes Bank Q4 Results: What to Expect
Yes Bank is set to announce its Q4 results on April 19, 2024, amid mixed expectations. According to a CNBC TV18 poll, the bank’s net profit is projected to decline to ₹538.9 crore in Q4, down from ₹612.3 crore in Q3. Despite this quarter-on-quarter dip, the results will likely showcase a 165% year-on-year (YoY) surge compared to Q4 FY2023’s net profit of ₹231.5 crore.
Key metrics to watch include:
- Net Interest Income (NII): Expected to rise by 10.2% YoY to ₹2,235 crore.
- Advances and Deposits: Steady growth in loans (8.2% YoY) and deposits (6.8% YoY).
- Asset Quality: Gross NPA ratio holding steady at 1.6%, with net NPA at 0.5%.
Profit Estimates and Year-on-Year Growth
Analysts anticipate a short-term profit contraction in Q4, driven by higher provisioning costs and macroeconomic pressures. However, the 165% YoY profit leap underscores Yes Bank’s recovery since its 2020 crisis. The bank’s strategic efforts to reduce NPAs and expand its retail banking footprint have contributed to this resurgence.
Key Figures:
- Q3 FY2024 Net Profit: ₹612.3 crore.
- Q4 FY2024 Estimate: ₹538.9 crore (CNBC TV18 Poll).
- Q4 FY2023 Net Profit: ₹231.5 crore.
This YoY growth positions Yes Bank as one of India’s fastest-recovering private sector banks.
Advances and Deposits Show Steady Growth
Yes Bank’s loan book (advances) grew to ₹2,46,539 crore by March 2024, marking an 8.2% YoY increase and a 7% sequential rise from Q3. Deposits also climbed to ₹2,84,848 crore, reflecting 6.8% YoY growth.
Breakdown:
- CASA Ratio: Improved to 34.3% (vs. 30.9% YoY), signaling stronger low-cost deposit mobilization.
- Credit-to-Deposit Ratio: Held at 86.7%, indicating balanced liquidity management.
CASA Ratio Improvement: A Positive Sign
The Current Account Savings Account (CASA) ratio is a critical indicator of a bank’s profitability. Yes Bank’s CASA ratio jumped to 34.3% in Q4 from 30.9% a year ago, driven by:
- Aggressive customer acquisition campaigns.
- Enhanced digital banking services, including UPI transactions (where Yes Bank ranks #1 in India).
This improvement reduces reliance on costly term deposits, boosting net interest margins (NIM).
Asset Quality and NPA Trends
Yes Bank’s asset quality remains stable, with gross NPAs unchanged at 1.6% and net NPAs at 0.5%. However, absolute gross NPAs rose slightly to ₹3,963 crore in Q3 from ₹3,889 crore in Q2.
Provisions:
- Q3 provisions dropped to ₹258.84 crore from ₹297.29 crore in Q2, reflecting better risk management.
- Liquidity Coverage Ratio (LCR) stood at 125%, ensuring short-term obligations are met.
Market Performance and Share Price Volatility
Yes Bank’s stock has faced volatility, peaking at ₹32 in early 2024 before plummeting to ₹17 due to:
- Broad Market Corrections: Indian equities fell for five consecutive months.
- Investor Caution: Lingering concerns over legacy NPAs and promoter transitions.
Despite this, analysts remain optimistic about a rebound, citing:
- Potential new promoter announcements.
- Strong UPI transaction volumes (Yes Bank processes over 1 billion UPI transactions monthly).
Future Outlook for Yes Bank
Yes Bank’s focus on digital innovation and retail expansion positions it for long-term growth. Upcoming catalysts include:
- New Promoter Acquisition: Likely to inject fresh capital and improve governance.
- UPI Dominance: Sustained leadership in India’s digital payments ecosystem.
- NPA Resolution: Continued recovery from legacy bad loans.
Investor Considerations Before the Results
While Yes Bank’s fundamentals are improving, investors should:
- Analyze Post-Results Guidance: Management commentary on NPA resolution and growth strategies.
- Monitor Macro Trends: Interest rate shifts and regulatory changes impacting banking stocks.
- Diversify Portfolios: Balance exposure to mitigate sector-specific risks.
Final Thoughts
Yes Bank’s Q4 results will be a litmus test for its turnaround narrative. With advances, deposits, and CASA ratios trending upward, the bank is poised for sustained recovery. However, market volatility and macroeconomic headwinds warrant cautious optimism. Investors should prioritize due diligence and consult financial advisors before making decisions.
