Yes Bank sees strong FCNR demand; corporate lending surges in Q1
Yes Bank is seeing strong demand for foreign currency non-resident (FCNR) deposits under the Reserve Bank of India's concessional swap window, particularly from West Asia
Yes Bank is seeing strong demand for foreign currency non-resident (FCNR) deposits under the Reserve Bank of India's concessional swap window, particularly from West Asia, while corporate lending grew sharply in the June quarter (Q1FY27). In a post-earnings call, managing director and chief executive Vinay Tonse said the bank had capped leverage on the FCNR product at nine times and exhausted its initial limits. It is awaiting fresh limits as banks crowd into the scheme. "We are seeing sufficient demand," Tonse said. He declined to disclose mobilisation numbers or targets, but said inflows were "more than my usual market share". The bank is currently routing flows through its GIFT City unit and is also in discussions with Sumitomo Mitsui Banking Corp. (SMBC) to secure additional limits. Quick answers to key questions • 5 QUESTIONS 1 What is the recent trend in Yes Bank's FCNR deposits? ⌵ Yes Bank is experiencing strong demand for foreign currency non-resident (FCNR) deposits, particularly from West Asia, under the RBI's concessional swap window.
2 How much did Yes Bank's corporate lending grow in Q1FY27? ⌵ Corporate lending at Yes Bank grew about 41% year-on-year in Q1FY27, driven by increased liquidity requirements from sectors like oil and metals. 3 Why did Yes Bank's managing director mention capping leverage on FCNR products? ⌵ Vinay Tonse stated that Yes Bank capped leverage on FCNR products at nine times because it had exhausted its initial limits and is awaiting fresh limits as competition increases. 4 What improvements did Yes Bank report in its asset quality? ⌵ Yes Bank reported a gross non-performing asset (GNPA) ratio of 1.3% and net NPAs at 0.2%, showing a significant improvement from previous performance levels. 5 Should investors consider Yes Bank based on its recent earnings performance? ⌵ Yes Bank's standalone net profit rose 34% year-on-year to ₹1,071 crore in Q1FY27, alongside improvements in asset quality and net interest margin, indicating a strong financial performance.
Corporate lending grew about 41% year-on-year, driven partly by higher liquidity requirements from oil and metals companies. Tonse said oil-related growth may have been partly a one-off due to recent pressures, but expects broader corporate growth to continue. "Otherwise, I would see a secular growth in the corporate book also across the quarters this year," he said. The growth was spread across clients and sectors, while the weighted average credit rating of its large corporate portfolio improved from a year earlier. The growth came largely from the bank's own product capabilities rather than its SMBC partnership. Yes Bank's standalone net profit rose 34% year-on-year to ₹1,071 crore in Q1FY27, while net interest income increased 17.5% to ₹2,786 crore. Advances grew 18.3% to ₹2.85 trillion and deposits rose 14.3% to ₹3.15 trillion. Net interest margin improved 20 basis points to 2.7%. Gross non-performing assets stood at 1.3%, net NPAs at 0.2%, and provision coverage at 81.7%.
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