AI-generated · cited to primary sources · not investment advice
Yes Bank (532648) May 2024 Filing Analysis
Does management do what it says?
The bank has already surpassed the 70% PCR target when including technical write-offs, reaching 80.1%. (5 exceeded across 5 tracked commitments)
“The redemption that will come through in Fiscal ‘25, we will make sure that, that balance becomes zero by the end of Fiscal ‘25, right. That is the first priority.”
The bank surpassed its recovery target for the fiscal year, achieving nearly INR 6,000 crores. (3 exceeded, 2 met across 5 tracked commitments)
“we are quite confident that FY ‘25 also we will see a similar trend, but definitely more than INR 5,000 crores.”
The conversion of warrants by Private Equity investors (Carlyle and Advent) resulted in a 100 bps accretion to the CET-1 ratio during Q1FY25, doubling the initial expectation. (2 exceeded, 3 met across 5 tracked commitments)
“21% women participation* in the Bank’s workforce with a target to achieve 25% gender diversity by FY 2024-25”
Both SME and Mid-Corporate segments grew at 26% Y-o-Y, hitting the upper end of the 'mid-20s' guidance. (2 exceeded, 3 met across 5 tracked commitments)
“we expect that within Advances, the Ratio of Retail + SME Segment Advances to Wholesale Segment Advances (Mid-Corporate and Large-Corporate) would remain at the similar level of 62:38 from here on over the near-to-medium term.”
The exercise of warrants by Carlyle and Advent affiliates resulted in a significantly higher boost to the CET1 ratio than previously guided. (1 exceeded, 4 met across 5 tracked commitments)
“Target to impact over 75,000 individuals by 2026”
See the full cited Management analysis of Yes Bank
Where does growth come from?
Capital levels have dipped slightly due to growth and risk-weight changes, but remain healthy and are expected to rise following warrant exercises. (1 decelerating, 2 steady across 3 signals)
“CET 1 Ratio at 12.2% ... Pro-forma basis, CET-I% as of March 31, 2024 including these proceeds [Warrants] is at 12.7%”
The bank is successfully reducing the drag from mandated low-yield deposits by meeting Priority Sector Lending (PSL) targets organically. (5 accelerating across 5 signals)
“Negligible Shortfall in PSL sub-categories in FY24 ... SMF [Shortfall] 0.0%”
Physical distribution expansion is steady, with 134 new branches opened since January 2023 to support deposit mobilization. (1 steady, 1 accelerating across 2 signals)
“Premises costs for Q4FY24 up 21.7% Y-o-Y ... largely led by 134 new branches opened since Jan’23”
See the full cited Future Growth analysis of Yes Bank
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