Yes Bank Q4 FY21 Conference Call Highlights | Yadnya Investment Academy

Management:

Mr. Prashant Kumar – managing director & chief executive officer, yes bank limited

Mr. Niranjan Banodkar – chief financial officer, yes bank limited

Ms. Anita Pai – chief operating officer, yes bank limited

Mr. Rajan Pental – global head (retail banking), yes bank limited

Mr. Ashish Agarwal – global head (wholesale banking), yes bank limited

FY21 Highlights:

• Granular growth of deposit franchise over FY20 by 55% to ~INR 1.63 lakh Cr
• Successfully raised 15,000 Cr capital via FPO in July'20 to recapitalize the bank
• Healthy operating profit growth of 42% YoY on back of increase in NII & reduction in operating expenses.
• Strong track record of recovering INR 4,933 Cr in FY21 from stressed assets pool

Q4 FY21 Performance:

• Operating profit has seen a healthy growth of 42% YOY and 74% QoQ. Operating profit in Q4FY21 was recorded at Rs 185 cr.
• Operating expenses lower by 14% YoY and 8% QoQ at Rs 1618 cr.
• Cost-to-income ratio has come down from 66% to 54%.
• The core fee income has grown by 22% QoQ and retail banking fees has also grown by 21% YoY and has recorded a highest ever quarterly performance.
• GNPA as of March ‘21 is INR 28,610 crores as compared to INR 37,869 crores in December ‘20. The gross NPA percentage has reduced annually by 140 basis points to 15.4% for the year FY21 and net NPA stand at 5.9%. PCR has improved from 68% to 75%.
• overdue book between 31 to 90 days has reduced by 28% over the last quarter.
• NII growth of 9% YoY (interest reversals in Q4 FY21 after Hon’ Supreme Court verdict on standstill NPAs & interest on interest).
• Retail disbursement at a lifetime high of INR 7,530 crores and SME disbursement of INR 4,612 crores.
• Net advances lower on account of accelerated NPA provisioning; Gross advances up by ~2% sequentially on back of retail growth.
• C/D ratio further improved to ~102% from ~116% in previous quarter & 163% in Mar 2020; Q4FY21 average LCR at 114% and the bank has ended the year with a LCR of 122%.
• Net exposure stands at INR 14,903 crores as compared to INR 18,613 crores in the previous quarter. Net Exposures such as NPAs, NPIs and other labelled exposures together has come down 20% QoQ and overall coverage has improved from 68% to 75%.
• The bank has a capital buffer of 280 basis points as deferred tax assets
• There has been a net loss of INR 3,788 crores in Q4FY21.
• Book size has grown by 42% YOY to INR 1,451 crores.
• UPI transaction has increased to 45% from 33% at the end of FY20
• The CET ratio has remained healthy at 11.2% despite the accelerated provisioning.
• Incremental slippage in FY21 is INR 12,305 crores and additionally the other exposure which are from NPIs and ARP loan etc. they stand at 12,852 crores as compared to INR 12,755 in December ‘20.

Balance sheet highlights:

• Granularization of balance sheet: CASA grew ~52% YoY, Ratio at 26.1%; Retail TDs grew 32% YoY; Retail advances grew 23% YoY with mix at 30%
• The bank has worked towards granularizing the balance sheet and in FY21 they have demonstrated this with an advance mix of retail and MSME at 51%, which is 700 basis point up from the last year.
• Gross advances up by ~2% sequentially on the back of robust growth of 5.6% QoQ in retail
• Balance sheet grew 6% YoY on the back of strong deposit growth of 55% YoY in the first full year of operations post imposition of moratorium in March 2020.
• C/D ratio at 102.4% vis a vis 162.7% last year.

Deposits:

• CASA YoY growth at 51.8%; 6.6 Lac CASA Accounts opened v/s 6 Lac in previous year.
• Total deposits in FY21 were at INR 162,947 Cr, which is approximately 55% YoY growth
• Gross Retail Disbursements of INR 7,530 Cr, small and Micro Enterprises disbursements was around INR 4,612 Cr.

Advances:

• Retail assets:

• Retail asset has grown by 23% YOY which is touching almost 50,000 crores and the share of retail asset to total advances as of now is 30% from 24% at the end of FY20.
• Retail asset disbursements trending upward driven by secured lending. Yes bank had a lifetime best loan disbursals in Q4 FY21 which was around Rs 7530 cr.
• Yes bank has a diversified retail book across several products with Secured Business Loans having the highest proportion of 21%
• Retail collections efficiency is back to pre-Covid levels. The retail collections efficiency in Q4FY21 was around 96%

• Rural assets:

• Yes bank has seen doubled QoQ growth in business originations (disbursements) since Q2FY21. Disbursement in Q4FY21 was around Rs 1,286 cr from Rs 602 cr in Q3FY21.
• 100% book qualifies under granular PSL lending
• High quality farmer financing book with NPA < 0.35%
• PAR30 & NPA under JLG financing stands at ~9.5% & 6% of total book respectively (inline with the microfinance industry standards). Minimal delinquencies in the book generated post COVID -PAR30 < 0.2%
• Collection efficiency in JLG book restored to pre-pandemic levels in March 2021
• The total book size is Rs 3580 cr. JLG financing has the highest % share of 53% followed by MFI lending which has 19% share.
• Digital & Analytics to enhance customer experience and reduce TAT
• Digital on-boarding, dedicated LMS for rule-based sanctions & disbursements and geo-tagged based monitoring
• Usage of Bureau data up to PIN code level for geographical expansions & periodic portfolio scrub to monitor portfolio health

• Small & Micro Enterprises:

• Steady growth in disbursements in Small & Micro Enterprises segment; 137% growth in H2 v/s H1. A total of Rs 4,092 cr disbursement was recorded in Q4FY21.
• 80% growth in FY21 in cross sell units (Rs 76,343 cr in FY21) and 50% growth in FY21 in liability book (Rs 9135 cr in FY21).
• Digital Lending Platform -Seamless customer approval experience; Self-assist digital tools -MSME App, Trade-On-Net, FX Online, etc. as a part of digital & Analytics to enhance customer experience and reduce friction.

Credit card:

• 58% of new card issuance in FY21 were basis spend-commitment.
• Average spend per active card has increased by 18% YoY.
• Strong growth in EMI (Loan on credit card) volumes in Q4 FY21 –233 Cr (100%+ growth over Q4 FY20).
• New Product Launches - Wellness & Wellness Plus card launched (Jan’ 2021) in association with Aditya Birla Wellness offering comprehensive benefits worth up to INR 60,000.
• Focus on digitization of the process for seamless service to customers.
• End to end digitization (including video-KYC) of the new cards issuance process to enhance customer experience.
• 11.3% of the cards were issued through end-to-end digital process in Q4FY21 as compared to 2.5% in Q4FY20.

Wholesale banking sector:

• Wholesale book witnessed a strong growth in the non-credit throughput during the year which is almost 4 times quarter-on-quarter and 100% of the non-credit rates throughput and 93% of the transaction clients are back to the pre- moratorium levels.
• 90% of peak-level cash management throughput achieved Volumes in flagship API Banking are 110% of peak volumes
• Greater than 50% YoY growth on Digital Trade onboarding and transacting volume throughput
• Increase in Net Advances in following sectors - Agri & Allied, Metal & Metal Products, Financial services, Gems & Jewellery.
• Reduction in Net Advances in following sectors - Commercial Real Estate, Electricity, EPC, Roadways, Media & Entertainment.