YESBANK — earnings call

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Prepared remarks

SUSTAINABILITY · Management

YES Bank Limited April 18, 2026

Moderator · Conference Operator

Ladies and gentlemen, good day, and welcome to YES Bank's Q4FY26 and FY26

Our first question comes from the line of Jayant Kharote from Axis Capital.

Jayant Kharote

Congratulations sir for good set of results.

The first question will be going ahead given that I know it's a short stint so far, but how are you looking at growth in the Bank for the next 1 year?

Is there anything you're waiting for to accelerate in terms of any of the Balance Sheet metrics?

Or do you think we can start with 15% plus growth?

And second, of course, is that if you could help us with the average CASA growth in quarter 4.

And compared to the loan growth, maybe the CASA has held up despite the rate cuts, but how do we sort of grow that in line maybe in that 14% to 15% on an average basis?

So how do you address these 2 questions?

Niranjan Banodkar

So, I'll start with the CASA growth on the average basis.

So, on both CA and SA have sequentially grown in the range of about 4%.

In fact, CA sequential growth has been slightly more than 4%, but blended is about 4%.

And if I actually look at Term Deposits growth, and I'm excluding the CDs that we ended up raising as well, the Term Deposits also have grown big picture at about 4%.

So, if I were to characterize the growth for quarter 4 across the Deposits, it's broadly anchored around a 4% CASA and TD.

So, I think we're kind of maintaining the CASA ratio at least from an average performance vantage point, right.

If I look at the year-on- year growth on CASA, that is anchored at around 11% growth rate on an average.

Again, this is -- we're talking about average Q4FY26 to average Q4FY25.

So that's on Deposits.

You had a question which you started with was on next year's growth.

And we've kind of discussed this on earlier calls as well.

We do believe that we are a franchise that indeed should be delivering growth in line with the industry, if not targeting more.

But there were reasons which were quite peculiar to us and conscious why we calibrated the growth lower.

But quite happy to report that we've already seen between December and March that the sequential momentum is beginning to quite accelerate.

And that's kind of ending up with a reported number of 11% on a Y-o-Y basis for Advances growth.

YES Bank Limited April 18, 2026 We do believe that momentum should certainly continue and not just in certain products or segments.

I think what we are now talking about is a lot more secular across segments.

Of course, Retail Disbursement growth rates are quite aggressive.

We're moving fast now, given that we now have confidence on the Asset Quality and Profitability.

But having said that, the book is slated to grow in double digits next year.

So, net-net, we put all of this together, we should certainly aim to grow in line with the industry, if not more, and that ball broadly anchors around the 14% to 15% range.

Jayant Kharote

If I could just squeeze in one last question on the margin.

This RIDF rundown has been quite healthy last year.

Going into next year, should this trajectory on margin expansion continue Q-o-Q?

Or could we see this coming back a bit?

Niranjan Banodkar

So, on a year-on-year basis, again, some of the rundowns that we had in RIDF this year also were more heavy from an H2 perspective.

So, to that extent, FY27 comparison to FY26, even if it is year ended, should have no material bearing.

But there is a rundown plan.

So, we've ended this year at about INR 27,900 crores, ballpark INR 28,000 crores.

We think that next year, at a minimum, the reduction should be about INR 6,500 crores.

That could also go as high as INR 9,000 crores by the end of March '27.

Moderator · Conference Operator

Our next question comes from the line of Jai Mundra from ICICI Securities.

Jai Mundhra

Good afternoon everyone and Congratulations on a good quarter.

Sir, first question is on your growth mix, right?

So, we have achieved 1% ROA, Asset Quality seems to be holding up reasonably well.

But Retail Slippages, while they are improving, they are still 2.93%.

And we see that Retail Advances are both up 4% to 5% on both Q-o-Q, Y-o-Y basis.

Given the SMBC induction as the largest shareholder, do you envisage any change in the loan mix between Retail, Wholesale, Commercial as you move towards industry level growth?

So that is question number one.

Niranjan Banodkar

So, on the growth mix, I think important to note is the Retail Disbursement growth because that's really an important controllable that we have, which we are driving faster.

So, if you look from a Y-o-Y perspective, in fact, we are kind of way above a 20% Y-o- Y growth.

We do believe that it should ultimately get normalized in the 20-25% range.

But what we are aiming to grow the Retail Book next year is actually should hit the double-digit growth.

So, let's say, about 10% to 11% is what we do believe it should deliver.

If I look at the Corporate Book, that's already growing at about 20%.

So, we do believe we have the levers to grow at 20%.

Commercial Banking is something that is a space we like.

Historically has been a good growth driver for us, and that continues to also deliver about 18% growth.

So, net-net, I think the momentum that is playing out as we are exiting fiscal '26 is quite secular YES Bank Limited April 18, 2026 across all segments.

And that, therefore, gives us the confidence to start delivering a growth in line with industry, if not more.

Now maybe for about a year or so, because Retail is catching up, but they are still maybe, let's say, end up growing maybe 10% to 11% next year.

To that extent, there will be some mix I would say, compression, but that's not going to be material.

And as we kind of move forward, I think we will anchor around a reasonably similar mix composition that we have right now.

Jai Mundhra

Sure.

That is very helpful.

And on the treasury, the bonds, the G-Sec had spiked during the quarter.

They ended at more than 7% at quarter end.

Do you had any MTM on investment book or if you can specify, was there any MTM loss either in the P&L or in AFS reserves or was there any offset?

Niranjan Banodkar

Sure, Jai, I will take that.

So as a market philosophy, we don't run very high open risk through our trading book, whether it's bonds or for that matter even FX.

While we've not asked, I can also confirm that even the FX because of some of the changes that came through regulations, it's not had any material bearing on our mark-to-market because as a philosophy, we don't run quite large trading positions on markets.

However, yes, we do acknowledge that the yields did go up and that has had a bearing on our, let's say, the minimum SLR maintenance book, which is largely parked in the HTM.

But we do also note that the yields have come up from the reporting period of March.

So, we will wait and watch how the yields behave.

But that's largely in the HTM book.

There has been some P&L movement through the AFS reserve, but that's already fully baked into our CET-1 computation for December.

And you would see that our CET-1 also continues to be healthy from a 13.9%.

We just consumed about 10 basis points for the March report as well.

So, no material impact from the yield increase.

On the contrary, we do believe that this should help us add to some yields in our investment book from a margin perspective.

Jai Mundhra

Right.

No, Niranjan, if you have the number for AFS reserves, let's say, Q3 and maybe the Q4, that will give some sense on what was the movement in the AFS reserves?

Niranjan Banodkar

You are saying in terms of the absolute value?

Jai Mundhra

Yes.

Niranjan Banodkar

The AFS reserve, we have a negative balance of about INR 100 crores as of March 31.

The swing would be about INR 200 crores.

YES Bank Limited April 18, 2026

Jai Mundhra

Okay.

Sure.

And you have mentioned that INR 340 crores of onetime standard assets provisioning as a step-up provisioning.

If you can elaborate on that, is this against any specific exposure?

Is this in the run-up to ECL or any more color on that?

Niranjan Banodkar

Sure, Jai.

Important question.

So, on that before I get into that, just a couple of context setting that I wanted to do.

So one, if you see, we continue to have a very strong recovery from SRs this quarter, which was in the range of INR 450 crores.

The second is we've also had one Corporate asset that got resolved, which had slipped earlier, much earlier, which was provided for and that also meant that we had a write-back of about INR 288 crores during the quarter.

And third and which is very fundamental and more important is our core NPA Credit Cost is also lower quite substantially quarter-on-quarter.

Now these were like the three material contributors to provisioning buffers that we have gives us the ability to create.

Second, what we do is we've usually followed quite conservative policies from a provisioning standpoint.

A great example is if you look at our NPA, we've kind of carried PCRs in the range of 80% plus now for the last three quarters.

And we've always stated objective to be quite high from an NPA standpoint coverage.

So as part of that philosophy as well, we kind of look through portfolio and our own provisioning policies.

And we did realize that there are sometimes evolving and possibly even prudent provisioning policies.

And that application we have done in quarter 4 of this year, which translates to about INR 341 crores.

I want to be emphatically clear here that the provisioning that we have done on certain, let's say, product or segments in no way reflect an underlying credit issue or an impairment or our view about that sector.

It is just what we thought was prudent in terms of -- and just being proactive in terms of taking more provisioning.

Jai Mundhra

Understood.

Thanks Niranjan.

And sorry, I have two more questions.

I can ask them now or maybe if you allow I can speak them now also.

Niranjan Banodkar

Okay.

Jai Mundhra

Sir, on the ROA trajectory, now we have achieved 1% ROA adjusted for Labor Code last quarter and this quarter, maybe more than 1% if I adjust this INR 340 crores contingent provisioning.

What is the next milestone as you had hinted that growth you would aim at similar to system?

How would you look at ROA trajectory because NIM seems to be having some tailwinds and Asset Quality anyway have reasonably good tailwind.

So what would be the next stop maybe exit FY27 or maybe full year FY27, if you can provide some color there?

Niranjan Banodkar

So it's again something that we've been saying we will want to exit FY26 with a 1% ROA.

And as you rightly pointed out, I think we are now beginning to deliver that more YES Bank Limited April 18, 2026 consistent with December also being 1% adjusted for the gratuity cost.

Now I would say that directionally having achieved this, of course, there are two important levers.

One is sustenance of this is what we have to make sure we are driving.

And the important contributor to that sustenance and improvement from here on, further improvement is really going to be on the core ROA.

We have to ensure and make sure that we still have some more of benefit that we will get from the J.C.

Flowers ARC write- backs over the next year.

So as we speak, we still have about INR 1,500 crores of face value of securities, which can get redeemed over the next few quarters.

So that what we have to do over the next year or two is really make sure that we have the core ROA construct to offset that, not only offset really expand from a beyond -- reasonably beyond 1% ROA.

So, I don't want to kind of really put out a number from a core ROA perspective.

But our objective internally is really to drive 25, 30 basis points of improvement from our core construct, right, where we get the margins higher, get our cost structure higher, get our fees higher.

And then, of course, if JC Flower benefits keep coming in, which we are indeed expecting even should play in FY27, and that further adds to our performance.

Jai Mundhra

Right.

So thanks again.

And then lastly, if you have the number for Credit Card Slippages and maybe PL Slippages, it looks like they are clearly improving.

But if you have the number in absolute INR crores, I think last quarter was some INR 180 crores for Credit Card and around INR 140 crores for PL, and that will be very useful.

Niranjan Banodkar

We'll pull that out.

I think maybe we might have interchange the numbers, Jai, from your records.

The Credit Card was about INR 133 crores and Personal Loans was about INR 180 crores.

So that INR 186 crores Personal Loans is down to about INR 160 crores.

And Credit Cards continued to be in the range of about INR 135 to 140 crores.

Jai Mundhra

Thank you very much and all the very best.

Niranjan Banodkar

Thank you, Jai.

Moderator · Conference Operator

Thank you.

Our next question comes from the line of Advait Date from Go Digit Life Insurance Limited.

Advait Date

Thanks for the opportunity.

Congrats on the good set of numbers.

A few of my questions have been already answered.

I had one question I wanted to get some color on.

So I wanted to understand a little on our branch expansion strategy.

So for the full year, we have added around 82 new branches.

I wanted to understand how the contribution of Retail Disbursements has been for the quarter from branches?

YES Bank Limited April 18, 2026 And as we move to the next leg of growth, how are we looking at branch expansion, which locations we are prioritizing and how that aligns with the loan sub-segments we are trying to prioritize growth in?

Rajan Pental

For your question, so we had laid out a guidance for the next 4 to 5 years with a plan of around 400 branches with an average of around 80 branches per annum, and we are on course of that.

We opened around 82 branches last year.

And we would be going ahead with that plan depending on if there is any upside available to do that.

That is point number one.

Point number two is on the disbursements.

Our internal customer sourcing is approximately 50% of the overall disbursals we do.

Out of that, approximately 60% actually comes from the branches through the branch customers.

So we would like to see this actually growing going forward.

There have been some calibrated growth strategy on the unsecured loans.

And now with the new rule engines and the new platform, when we look at increasing that share as well, this should also result in increasing the contribution coming from the branches.

On the third part, when we look at our branch expansion, we typically look at three points.

One, what is the Deposit growth happening in and around that pin code.

Second one is how is the credit growth happening?

And third is how the quality of credit growth available in and around that Bank.

So these are largely the three broader points we keep it in mind while going for any selection of a branch location.

Advait Date

Got it.

Got it.

That's helpful.

Just one quick follow-up question on an earlier question asked on RIDF.

You did give out the rundown trajectory for the next 1-year.

I wanted to understand how the mix would look like after 1-year?

Would the decline be sort of linear or would it be accelerated post 1-year?

Thanks.

Niranjan Banodkar

So the reduction of RIDF from here on will -- so for example, FY28 and FY29 will be equally split and then there are some maturities in FY30. So I would say it starts getting thinner in terms of the pace of reduction.

So FY28 will be similar to FY27 potentially, but FY29, FY30 will start getting thinner.

Advait Date

Okay.

Got it.

Thanks.

Thank you.

That’s it from my side.

Thanks and all the best.

Niranjan Banodkar

Thank you.

Moderator · Conference Operator

Thank you.

Our next question comes from the line of Dev Dey from HorsePower Securities.

Dev Dey

Yes.

Good evening, gentlemen.

Vinay M. Tonse

Mr. Dev.

Good evening.

YES Bank Limited April 18, 2026

Dev Dey

Yes, good evening, everyone.

Congratulations on an excellent set of numbers.

Vinay M. Tonse

Thank you so much.

Dev Dey

It seems that the performance has been improving quarter-on-quarter, and it's very pleasant to be part of your story.

My question is by the next year, what is your target balance sheet size in terms of loan book?

Niranjan Banodkar

So, we've said we've not put out a specific numerical target.

We've said that we will want to have a growth rate in line with the industry, if not be better.

And that -- our expectation is that should be in the 13% to 15% range.

Dev Dey

What percentage, I missed it.

Sorry?

Niranjan Banodkar

13% to 15%.

Dev Dey

Okay, okay, okay.

And what would be the average targeted yield on the book?

Niranjan Banodkar

So, for yield on advances that we've had as we look to exit March, that has been about 9.2%.

Dev Dey

9 point?

Niranjan Banodkar

9.2%.

Dev Dey

Okay.

Thank you.

Vinay M. Tonse

Thank you, Mr. Dev.

Dev Dey

Thank you for sharing the details.

Vinay M. Tonse

Thank you for coming.

Thanks.

Moderator · Conference Operator

Thank you.

Our next question is from the line of Rama Subba Reddy, an Individual Investor.

Rama Subba Reddy

Good evening, everyone.

So hearty congratulations, Vinay sir, for becoming a new MD and CEO of YES Bank.

And yes, the numbers have been very good.

I mean yes, the NPA Asset Quality and also look now Deposits like 2020, where we were under 2026, it's like 3x growth, very good.

And also like the Profits also looking promising, like last year, like whatever management guided that ROA, we have exited 1%.

So basically, my question is like so this ROA like I mean, FY27 and FY28, FY29 in the upcoming years.

So, I think we hope we maintain 1% ROA and also like on top of that, that number will grow quarter-on-quarter on a yearly basis.

Can you describe on that YES Bank Limited April 18, 2026 so that we will have good confidence that whatever we built so far, we will not lose the momentum?

Niranjan Banodkar

So, thank you very much, sir, and thank you for being quite supportive on the Bank.

So, we really value that.

Thank you for that.

On the question on ROA, we've said this that March '26, we will look to exit with a 1% ROA.

And I did also allude to that in my previous response.

I think the most important thing is now to sustain this 1% ROA.

Of course, there is a play that we also have from provision write-back of JC Flowers ARC.

But what we have very emphatically worked upon internally is to say, internal, outside of the JC Flowers ARC write-backs, we will look to improve our ROA 25 to 50 basis points.

And it's a function of Net Interest Margin improvement, is a function of making sure we're disciplined on cost and containing the credit cost as well.

So really, that's our endeavor.

What you've said are exactly our aspirations and our ambitions as well to not only maintain, but to improve over the next 2 to 3 years on the ROA trajectory.

Rama Subba Reddy

And even this RIDF is reduced now, like earlier, it was like 11%.

Now it is significantly reduced.

And I hope this -- I mean, like RIDF funds and also like, it can improve the loan growth and also our NIM also, like any target in the next year like to cross 3% or any guidance on that, sir?

Like currently, it is 2.7%?

Niranjan Banodkar

So, on that, sir, we usually refrain from giving the near-term guidance.

We've said that structurally over a 3-year period, let's say, now about 2 to 3 year period, we do believe that we will want to get into a 3.25% to 3.5% kind of a range from a margin perspective.

And as you rightly pointed out, RIDF is going to be an important contributor to getting the Net Interest Margins higher as well.

So that's really one big driver.

Second, we have to make sure that our loan spreads are quite disciplined, and there's a lot of work that we've already done from a cost of funding standpoint.

So, if you look at our Savings Account rate over the last 1 year, we've taken the benefit of this reducing rate cycle to cut our rates by over 150 basis points.

So, Savings Account rate, which was blended 6% is now well below 4.5%.

We've taken another rate action in April as well.

So, our objective is to also make sure that we are focused on getting our Cost of Deposits, which we believe is very core to a Bank and its liabilities to get that Cost of Deposit structure lowered as well.

So not only RIDF, which anyway is on a bit of an auto mode of rundown but work hard to also get the loan spreads improved through our Cost of Deposits and funding as well that we believe should help margins.

And last is, as the Retail growth is now coming back and as the mix starts playing out on the loans as well, that will also indeed help us improve the Asset, Advance yields, YES Bank Limited April 18, 2026 and therefore start playing into our margins as well.

So, we will work hard and to make sure that we are driving each of these vectors to the right direction.

Rama Subba Reddy

Yes.

And last question, is there any plan...

Moderator · Conference Operator

We request you to please rejoin the queue if you have any further questions, please.

Our next question comes from the line of Amit Varma, an Individual Investor.

Please go ahead.

Amit Varma

Congratulations on maintaining the growth momentum of performance.

This is heartening.

Can you give us an update on the AT1 bonds case?

And what do you think would be the impact on the Balance Sheet in the case of an adverse judgment?

Niranjan Banodkar

So, on the AT1 matter, this matter is subjudice, as you all know.

The hearings have taken place at the Supreme Court, and the matter is also reserved for judgment.

We will wait to hear from the Supreme Court -- Honorable Supreme Court on the verdict.

And we will make sure that we are also coming back to all our stakeholders and updating them on what the outcome and its impact on the Bank would be.

I would refrain from passing a judgment on what we expect.

We stated this earlier as well.

We do believe the actions we took were in line with the contractual obligations and the processes that were allowed.

But it is important that we respect the proceedings of the court and allow the judgment to be out.

Moderator · Conference Operator

Our next question is from the line of Shreyanth from Sundaram Asset Management Company.

Shreyanth

Firstly, congrats on an amazing result.

I just want your quick view on the West Asia war and its impact on the MSME segment, given that it's one of your key growth drivers.

So where do you see that?

Are you still planning to continue growing it?

And how do you factor the stress over there?

Manish Jain

Sure.

Thanks.

So, we are proactively monitoring our portfolio, and this is the exercise that we've already started.

It's good to report that all our clients, whether it's an MSME or larger clients have been managing well.

They have not shown any signs of stress.

But this is a space that we will continue to watch because it will have an impact on the inflation and there can be second order impact.

So, we continue to monitor our portfolio closely and talk to our clients to understand the impact and the actions that they're going to take.

Currently, since we have had a good client collections over the years, all our clients have been able to manage this crisis well.

YES Bank Limited April 18, 2026

Moderator · Conference Operator

Thank you.

Ladies and gentlemen, we will take that as the last question for today.

I would now like to hand the conference over to Mr. Vinay M.

Tonse for closing comments.

Over to you, sir.

Vinay M. Tonse

Yes.

Thank you so much, and I must place my sincere appreciation on record for all the esteemed analysts who could make it today.

I know it's -- of course, it's a Saturday afternoon and also a very busy day because the other 2 Banks also that came in today.

I appreciate you taking time off and then coming and joining us.

Thank you very much.

Moderator · Conference Operator

Thank you.

This brings the conference call to an end.

On behalf of YES Bank, we thank you all for joining us.

You may now disconnect your lines.