Yes Bank Limited (YESBANK) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to YesBank's Q1 FY27 results conference call. On the management panel, we have with us today, Mr. Vinay M. Tonse, Managing Director and Chief Executive Officer, Dr. Rajan Pintal, Executive Director, Mr. Manish Jain, Executive Director, Mr. Niranjan Banotkar, Chief Financial Officer, and Mr. Sunil Parnami, Head, Investor Relations and Sustainability. Mr. Vinay M. Tonse will now give you an overview of the results, which will be followed by a Q&A session. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing star, then zero on your touchstone floor. Please note that this conference is being recorded. Participants are requested to please ask questions pertaining to the bank's Q1-FY27 results only. For any other information, you may reach out to the corporate communications team separately. I now hand the conference over to Mr. Vinay M. Tonse. Thank you, and over to you, sir.

Thank you very much. Am I audible, please? Thank you. Good afternoon, everyone, and at the outset, thank you for joining us for the S-Bank Quarter 1 FY27 Earnings Conference call. I know today many other banks are also coming up with their results, and I really appreciate all of you joining us. Here, I am joined by my senior leadership team, and we look forward to taking you through the key highlights of the quarter, and we will be very happy to answer your questions thereafter. Before I turn to our performance, let me start with a few words on the environment in which we operated this quarter. The Q1 quarter was characterized by resilient domestic demand, strong tax buoyancy, and steady manufacturing momentum set against rising cost pressures and a more uncertain global backdrop. Encouragingly, the underlying momentum remains firm. Barrett tax collections grew a healthy 16.4%. GST stayed strong at nearly 1.95 lakh crore of collections in June. Manufacturing has now been in expansion mode for 37 straight months. Industrial production hit a 5-month high, led by capital goods. The strength is also being reflected in the uptick in the system-level loan growth over the past few months. One area of pressure was inflation, which rose to a 17-month high of 4.4% on food and fuel costs, prompting RBI to lift its inflation projection to 5.1%, though the monsoon recovered well after a dry start, easing some of that concern. Have a good one. On a positive note, the GDP growth forecasts have not been impaired. Now, I turn to the highlights of our Q1 performance. It's against the backdrop which I just gave that at the core, this has been another encouraging quarter for us. Our net profit grew 33.7%, that is, year on year, to Rs. 1071 crores. What I would really like to highlight is the quality of this quarter's January. We achieved these results even after moderation of some of our non-core income streams, such as gains from our security receipts portfolio, which were significantly lower at Rs. 86 crores this quarter, against Rs. 338 crores in the same quarter last year. And treasury income too was lower. There was a one-off interest income on tax refunds of 119 crores during this quarter. But even normalizing for that one-off, the underlying performance remains strong. In many ways, this is precisely the outcome we had spoken about last quarter. About our core business gradually taking over from the one-off gains, and that's exactly what's happening now, with our recurring sustainable earnings engine increasingly driving performance, and that's exactly the direction we want to be heading towards. Our operating profit grew 25.5% year on year to Rs. 1704 crores. Net interest income was up 17.5% year on year at And our net interest margin improved 20 basis points year-on-year to 2.7%, also holding steady sequentially. We continue to benefit from lower cost of deposits, even as yields are impacted by the interest rate cut transmission and the change in mix. Having said this, our near term aspiration is to move. The NIM towards the 3% plus handle over the next two years, and the underlying levers are well understood. The continued rundown of the low yielding RIDF and priority sector deposits, disciplined deposit reprising, and improving CASA mix. I would caution that with the rate cut cycle now on pause and deposit competition intense, margin expansion will be a steady structural climb rather than a Straight line, quarter to quarter. We momentum has been a real positive for us. Our core fees registered a strong 18.7% growth year on year, with broad-based traction across cards, third-party products, forex, as well as transaction banking. Sustained cost discipline remains core to how we run the franchise. Our cost-to-income ratio improved further to 62.8%. From 67.1% a year ago, reflecting genuine operating leverage, income growing well ahead of costs. Return on assets for the quarter was 0.9% and return on equity was 8.3%. Moving to the asset quality. We see a further improvement of asset quality this quarter, and it has been the case, despite the seasonality, that the first quarter typically carries. On a reported basis, gross slippage was lower at 1.4% of advances against 1.6% in the previous quarter, and 2.4% in quarter 1, FI 26. Guarmonize for an intra-quarter account movement in quarter 4. Slippages are at broadly similar levels quarter-on-quarter. And most encouragingly, the improvement in the retail segment has continued, with retail slippages at their lowest in the past 10 quarters. And having said that, our work continues. Our GNPA and LNPA ratios stand at 1.3% and 0.2% respectively, with provision coverage healthy at 81.7%. Our recoveries and upgrades for the quarter aggregated to Rs.564 crores, including 86 crores from security receipts portfolio. Despite tepid gains from the SR portfolio in Q1, we maintain our guidance of Rs.800 to 1,000 crores of gains from this portfolio for this financial year 27. Moving on to the growth and balance sheet. Growth was broad-based across our businesses. Total advances grew 18.3% year on year to Rs. 2.85 lakh crores. Within this, the corporate and institutional banking grew strongly. Commercial banking, which largely includes MSME, sustained its momentum at 17% year on year, and retail banking advances grew 6.9%. I would offer one point of context on the headline number. A part of the corporate growth is transitional and shorter tenor in nature. However, on an average balanced basis, the bank's underlying loan growth is in the 50 to 16% handle, and that's the growth band we find comfortable for the franchise, and it sits squarely with our commitment to grow in line with the industry or slightly ahead of the industry. It's also heartening to see retail disbursements growing at 27.5% year-on-year for this quarter. On deposits, the total deposits grew 14.3% year-on-year to rupees 3.15 lakh crores. CASA deposits grew 14.3% year-on-year and stronger still at 15% on an average balance basis, a creditable outcome given the sharp rate actions taken by us during FY26 as well as in Corte 1 FY27. Retail and branch-led deposits now comprise close to 60% of our total deposits, reflecting the growing granularity of the franchise. In a system where deposits are the binding constraint, our granular, branch-led liability franchise is exactly where we are choosing to compete. Our capital and liquidity positions remain comfortable with a CET1 ratio of 14% and LCR of 138.2%. Now, this has also been a quarter of significant external validation. And I would like to specifically highlight the recognition our progress received from the rating agencies this quarter. Moody's upgraded our issuing rating to BA-1. CARE upgraded our Bezer-3 Tier-2 and Infrastructure Bonds to AA+. HICRA upgraded the same instruments to AA, and SMP Global has assigned the bank its inaugural international rating of BB+. Taken together, these actions are an important, independent affirmation of the bank's strengthening fundamentals, our improving profitability, better liability profile, enhanced asset quality, robust capitalization, and the confidence drawn from strong institutional sponsorship. These upgrades also carry tangible benefits for our funding costs, our wholesale and financial institutions relationships. A few other updates moving towards the conclusion. We were awarded the Most Sustainable Bank at Business Today's India, India's Most Sustainable Companies 2026, and we were also included in the FTSE for Good Index for the fourth consecutive year. We were recognized also among the top 25 India's best workplaces in BFSI for the year 2026. Our NRI homecoming campaigns earned several awards for being most disruptive in the use of AI. To sum up, we operated this quarter in an environment of resilient domestic demand but heightened External uncertainty, and against that backdrop, S-Bank delivered a set of results that reflect consistency, discipline, and steady progress on our stated priorities. Our compass for the year ahead is unchanged. While our aspiration would be delivering a full year ROA around 1%, our focus would remain on improving the core profitability and grow advances and deposits around in a profitable and calibrated way. Deepen our deposit and casa franchise, move margins structurally higher over the medium term, hold the line on asset quality with conservative provisioning. All of this anchored in our PPT structure, which is the people, product, processes, and technology structure, and also along with collaboration with SMBC, all within the strong governance framework. We are ambitious about where this bank can go, and also as realistic about the environment we operate in. Our foundation is solid, our strategy is clear, and our execution is getting better every quarter. And that gives me a lot of confidence on the road ahead. Thank you very much again for joining us. We would now be happy to take your questions.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Dev Day with Hotspot Securities. Please go ahead.

Hi, Dev. Good afternoon. Good afternoon. Yes, good afternoon to all of you, the board members, all the board members. And my heartfelt congratulations to you for maintaining the performance up to the level. Expected by us. Okay. And excellent set of EPS numbers. So, again, I would like to ask you about the roadmap in future. So, what would be the net order loan book you are targeting by the end of this year?

Yeah, so now, Devji, thank you very much for this question. What we are looking at is just, see, we are also looking at what sort of funding resources we have, and that gives us a lot of comfort as to our liquidity available. So now moving forward, we endeavour to grow at a little above... What the industry would be growing at, and which is, which is what, just as happiness, it could be in the range of maybe 15 to 17 percent.

And, and, and my another question would be, just a few days ago, your board has passed a resolution regarding the raising of capital.

Yeah, so as far as the capital is concerned, this is an enabling or enabler for us to keep in readiness, but at the moment, we have sufficient cushion to grow for the next maybe four, three or four quarters. Right? But at the same time, we are keeping ourselves open, and this is a market where we keep looking at opportunities, and if there is an opportunity for increasing our capital cushion, we would definitely not mind doing that, and that is where we kept the enabler in place. And we also have this thought process within ourselves that if our peers are better capitalized than us, Is there a point where we should be looking at, you know, increasing our own product? But at the moment, we are comparing. That's the point I would like to make.

Okay, okay.

So by the end of this year, are we going to see a very pleasant picture? By the end of FY27? What is the view of management?

Devji, I didn't get you. What was it you said?

By the end of 2027. Are we, we will be able to view a very pleasant picture about this bank, institution?

Oh, yes. We are quite confident. The way we are seeing the last few quarters.

Sure, sure, sure. Sir, let's hope for the rest. Thank you.

Thank you so much. Thank you so much, Vijay.

Thank you. Our next question comes from the line of M.B. Mahesh with Kotak Securities. Please go ahead.

Good afternoon, sir. Two questions. One is on this.

Good afternoon, sir.

Sir, two questions. One is on the entire FNR deposits. Just wanted to understand how are you looking at that underlying opportunity and where are you positioned on it currently?

Hello. On the FNR, Mahesh, a couple of things I would like to mention. One is there is a very strong demand that we see. And these come from two aspects. One is the aspect of the pure deposits that come in, and second is the aspect of leverage. On both these, we are seeing very strong demand, and for the leverage part, you may be aware that we need to have certain limits in place, and whatever limits we have already got, We have filled them also on the leverage part. And we are doing a leverage as of now. We have decided that we will keep it to 9 times, 9x, right? And going forward, we may change the leverage also if we feel that the market would look at us that way, right? If there is an expectation that we should raise it. But otherwise, as of now, we are keeping it at 9x. And then we have, though I cannot give a specific number to it, Mahesh, we are quite ahead of the market, I would say, or some of the other banks.

Sir, just one clarification. On this product, would you be getting any support from your largest investor at this point of time, or is it still a very armless kind of a transaction that is happening on the ground? Thank you. Thank you.

Sir, I'll answer this. For this particular transaction, we are not having a constraint of any armless, and we are in the process of working out certain limits. So, we are looking actually at getting something out of that.

So, just to add, we are working with many international banks for the limits, you know, to make this facility available, including SMBC.

And how easy or difficult is it on the ground? Or if I were to ask, what is the concerning factor for this product, not having picked up as much as one would have expected it would be?

So, if you just think about, you know, what's playing out, there are two macro themes playing out. The borrowing spreads globally have inched up, right? For the overseas financial institutions to take a macro view on India for a five-year period, the spreads are higher now, right? That's number one. Number two, it's also a function of where the global liquidity is sitting. And if you think about it, it's not that it is equally available everywhere because ultimately somebody, some overseas geography or set of geographies will have to fund India for the size that you're looking at. The risk limit has to go up by that much notches. So it is a function of the process of the risk review and the limits getting set up across different institutions for a period of three years to five years. In a manner that is also commercially viable and conducive, I think that play is underway, and therefore it has not been, you know, as fast as how it would have been, because there are also macro fields of geopolitical. Perfect, perfect, perfect, perfect.

Vinay, sir, you have seen this company now for closer to five months, and... Could you tell us, in terms of having seen this now for a little longer, the issue that we are seeing from the outside is that the margin is the key problem. Within the margin, there are two sides. One, we understand the cost side. There is also a problem on the yield side. So, do you have some thought process on how does this improve from here onwards, or do you think that you will still need some more time to give an answer to this?

Da-da! Answer I have, and of course this is one of the most important, you know, priorities for us also as I came in here. And both these, the initial thoughts which I had, the drivers of how do I expand the margin, and they are working fairly well, what I have seen in the Q1, I see. Right? You see, basically, we are also aware that since last April, the previous April, right, not last April, the previous April, that's the previous financial year, we have actually substantially come down on the cost of deposits, right, and that has played out very well for us without actually. Resulting in any attrition of deposits, right? So this is something which gives me a better pricing power. The cost of deposits going down, the cost of funding going down, gives me a better leverage on the type of assets we are picking up. And also, at our discretion, we are also looking at products which are increasingly giving us more yield, right? So I think that way... This is something which is not too much of a worry for us right now, for the NIMA expansion.

And do you do have any number in mind for, let's say, in FI 28, where do you want to see the margins?

Yeah, I think north of 3 is something we would be able to achieve.

Thank you.

Thank you, Manish. Thank you.

Thank you. Ladies and gentlemen, to ask a question, you may please press star and one. You are also requested to please restrict yourselves to two questions only. If you have any further questions, you may rejoin the queue. Our next question comes from the line of Narendra Porval, an individual investor. Please go ahead. Hello.

Namaskar, sir. Rawa Jari, Amiri. Namaskar, Narendra Ji.

Thank you. Good morning, everyone, and welcome to the call. Good morning, everyone, and welcome to the call.

Our next question comes from the line of Sajal Raj. From Zenflow Finance Private Limited. Please go ahead.

Good afternoon, sir. Hi, good afternoon. Sir, I have one question. Okay, so my first question will be, advances of growth faster than deposits this quarter. So, how do you plan to balance growth with deposit mobilization going forward? Should we expect deposit growth to catch up over the coming quarters?

So, Neerajan here. Thanks for the question. So, advances growth for us is, yes, certainly higher, but we said that in our opening remarks as well, that we always go through some transient moments on the end of period balances, and therefore a metric that we internally track is actually the daily average balances. And if I see the daily average balances for both advances and deposits for June quarter versus March quarter, the CD ratio actually has remained the same. So, there has not been a worsening CD ratio. In fact, both growth rates for deposits as well as advances are in line. Number two, and it's a very important principle question. We will continue to focus on liability-related balance sheet expansion. The idea is never to really aggressively pursue assets in the absence of. Thank you.

Thank you so much, sir.

Thank you. Our next question is from the line of Shreyas Pimpley from Nomura. Please go ahead.

Hi. Good afternoon, sir. Thank you so much for the opportunity. My question was on SR recovery. This quarter, we had SR recovery of around 86 crores versus last quarter of around 446 crores and higher in the previous quarter. Can you explain what is the reason for lower recovery of this program?

So, Shreya, thank you for the question. There is some echo. So, my request would be if you can just go on mute, and then we'll be happy to take a second question from you. So, on security receipts, I think absolutely a right observation. We have had SR redemption that 86 crores have compared to 450. We have also been saying that the face value of security receipts, which is now outstanding at 1,500 crores, it's coming down, right? So, the recoveries that are going to come through are going to be a little bit more unpredictable. Not that there is no stored capital or stored value sitting in the security receipts book, it is still very much there. So, we have a face value outstanding of 1,500 crores. Against that, actually, the NAVs are upwards of 2,000 crores, and NAVs are today's present value. So if you actually look through from a gross recovery standpoint, the number could be slightly higher than that. But the resolution is a function of what JC Flower does, their execution, and we have no control on the pace or the timing of those executions. So, we will go through these periods where one quarter could have a higher security receipts resolution, in another quarter you may have a much lower, but at a very structural level we said that during fiscal 27, we do believe, you know, let's say anywhere between 800 to 1000 crores for the full year should be a number that we expect to come through, but as I said, I want to caveat that it's finally a function of what JC Flower does. So, it is possible that we could get higher than 800 to 1,000, or it is also possible that we could also be slightly lower. But our sense is 800 to 1,000 should be a reasonable probability to ascribe for fiscal 27.

Yeah, thank you so much for that explanation. My second question… My second question was on one-off in net interest margins. You highlighted that 119 crore of interest on IT refund. If we remove that, the margins are down around 6, 7 basis points, according to my calculations. Can you explain, I mean, what are the things that will help us improve margin from here on?

So, Shreve, I think one clarification is that the interest on refund actually forms part of a non-interest income and not part of the net interest income. So, it is not, you know, although the, it is interest on income tax refund, we do not include that as part of the NII line, and therefore, it is also not part of the You know, the net interest margin computation. So to that extent, there is actually no adjustment. Our net interest margin continues to be stable on a QOQ basis. Sorry, on a QOQ basis. My apologies.

Understood. Thank you so much for the explanation. Those were my questions.

Thank you. To ask a question, ladies and gentlemen, you may press star and one. Our next question comes from the line of Jay Mundra from ICICI Securities. Please go ahead. Jai Muntra, your line has been unmuted. You may proceed with your question. We do not seem to be receiving a response from the current participant. Ladies and...

Yeah, I think we could hear, Jay.

Sir, I wanted to check on your capital raising plan. We have a board approval in place, and we also have a court case which is pending. The outcome is still pending. We have a decent 14% CET1, but just wanted to check, you know, your timeline and quantum, and would this have any bearing from the court case?

So, Jay, I think first, Neerajan here, so first quick clarification, which is your second part of the question, whether this capital raise has a linkage with the board, with the 81K, so, you know, we follow a practice of having an enabling approval in play. And that is something we've continued from last year. So, we had the same approval for fiscal 26. We also have the same approval now effectively for fiscal 27, actually till the date of AGM. So, it is not a trigger of any particular event or court case. I think that's the first clarification. The second point is, you know, at 14% core equity ratio. We do believe that, you know, we have reasonable capital for at least the next one year of growth. What gives us that confidence is also because we do have the DTA, which is available to us. So one, the ROE structure itself is improving. So, let's say ROE of about 8 to 8.5% is accreting to my capital. But more importantly, the effect of DTA on that ROE is also playing out, meaning the bank is able to actually grow at anywhere between 12 to 13% of risk-weighted assets and not consume capital. Right? And therefore, you know, even if the growth were to be in excess of 13%, let's say, 15 to 16%, the quantum of consumption of capital is lower. So, the limited point I wanted to make is, we believe 14% is reasonable for the next, you know, four quarters of growth. Having said that, capital is a subject that the reason we keep an enabling approval is because Sometimes capital, you want to look through raising capital, which can take the 14% maybe in line also with some of the peers because it also adds to buffers, right? And we kind of track some of the other banks. That's the way that the rating agencies also look at us. More buffers are always good. And, you know, that's something we've worked on over the last, you know, three to four years. So if you go back to the last capital race, we had actually raised it when our CT1 was at about 11 to 11.5%. This time around, clearly, we don't want to drop to those levels. We will raise it, let's say, in the 13% handle, right? So, we want to keep adding to our buffers as well. So, whenever we think that opportunity is right, available with right players, you know, that is in the interest of our shareholders, you know, we do want to keep that optionality available to us. Hence, an enabling approval.

Sure. Thanks. That is very helpful. And should we just, I mean, regarding the court case, of course, this is better. And we will be hearing from the court itself. But has the bank, I mean, there's no pending provisions, right? I mean, if it come, it comes, right? There is no backup for in case the decision is adverse, right? That is how it should be.

So, there is no adjustment to our financial statements on account of this court case at this point in time.

Right. Okay. Secondly, on the retail growth, right, so overall growth has been strong. We are now 18%, which is slightly higher or maybe similar to system. But that seems to be driven by corporate in a large part. Retail is still 7% types. So, what is your strategy now? Retail slippages also seem to be you know multi quarters low. How should one look at the retail growth for let us say FY27?

Hi, this is Utajan here. So, retail is actually on a very strong wicket, and lastly, one of the reasons being that the slippages are under control, and last one year, we have really worked on the platform, scorecards, and also refresh, policy refresh. So, from here onwards, you know, there is the trajectory from being flat to a 7%. So, this is one journey which you look at from a book perspective. But on an incremental basis, actually, this is a business which is growing between 25% to 30% depending on segment to segment. You know, when a portfolio remains flat for a year or so, the book takes some time, but on the momentum, on the fresh business, we are in a very steady state and in a good state to be in a good range of 25 to 30%. Now, this will start reflecting in the subsequent quarters when it comes to the book growth point, but right now, we are very, very strong on the disbursements.

Okay, sure. So, I mean, can we reach like mid-teens number by FI 27? That is how, because at some point of time, the disbursement will translate to loan growth, right?

Yeah, sure. Absolutely. We are working towards that as well.

Sure. That's helpful. And secondly, on recovery targets, sir, I mean, if you can specify either from SR recovery. And, you know, overall recovery, we used to have a 5,000 crore odd numbers, but of course, after that, you know, a lot of recovery has already happened. So, what would be your sense for FY27 recovery numbers?

So, the other recoveries that we were talking about, right, one of the reasons we were talking about the gross recovery number at that stage was because some of it was also predicated from the corporate resolution. To be fair, you know, I think we would not ascribe a lot of value now to the corporate resolution because that story is behind us. So what we now sit with is really the JC Flower ARC and which, like I mentioned, as compared to last year, about 1,500 crores. You know, at least we do believe that anywhere between 800 to 1000 crores is something we should see in fiscal 27 also playing out. On the retail recoveries and upgrades, that is anyways now forming part of the net credit cost structure at the NPA. So, you know, we are now segregating that and dropping up to give you a headline number on the recoveries and reservations. So, you know, I would say very focus for us is really on the core ROA now. We said this last time as well, our objective continues to improve the core ROA. Meaningfully, our expectation is fiscal 27, you know, we should see a 15 to 20 basis point expansion in the core ROA. And if the resolutions, let's say the external factors on bond gains and trading with all of those elements also play out, you know, I think we should be able to also deliver the fully reported 1% ROA for fiscal 27.

Right, that is very clear. And lastly, if you have the ECL transitional estimate as to what could be the, let's say, one-time transitional impact for bank as you transition to ECL next year.

Thank you. So, Jay, we've, again, we've not publicly disclosed those numbers yet because we are in the process of putting that together. The ECL number we've said has a component of, for us, has an offset from the security receipts. So for us, if you allow us the benefit of security receipts, actually there is no impact on ECL. However, What's going to happen is that the ECL adjustment for security receipts will not be allowed in the balance sheet. So we have to keep taking that through the P&L for the year. So at the gross level, there is likely to have some ECL impact. We don't expect that to be very material. Also, adjust or take into account the fact that the new circular is also coming in on credit risk weighted assets from 1st April. So, when we kind of look at both these circulars together, which is the ECL transition impact and the new capital adequacy circular credit risk weight, We do believe that the impact, if at all, is not going to be material on our core equity. So I think that's really the headline message, but we will come back during the course of this year as we firm up these numbers so that we can give you a better visibility of what impact would play out.

Sure. No, that is very helpful, Rajan. Thank you and all the very best.

Thank you, Jay. Thank you, Jay. Thank you very much.

Thank you. Our next question comes from the line of Shreyanth KT with Sundaram Asset Management Company. Please go ahead.

Hi, good afternoon, team. Can you guys hear me?

Yes, loud and clear, Shreyanth. Thank you.

I hope all of you are doing well. Just a quick question. I believe you had called out earlier that you're going to be more cautious in the commercial banking and semi-segment, but then I saw that the slippages have gone up, actually. So, could you point out is there any specific segment or cohort you're seeing stress, and what is the situation on the ground and impact from the recent MAC situation?

So, our commercial banking portfolio continues. To be of high quality, and you know, the slippages are quite controlled in Q1 as well, and while we continue to assess and monitor the portfolio very closely for any impacts of the West Asia war, but happy to report that, you know, there is very limited impact on the portfolio, and the clients, you know, have managed. This crisis very, very well. So, you know, in a nutshell, the portfolio quality continues to be very good.

Okay, perfect. Thank you. And quickly, one more. Just on the retail, again, I already answered some of my questions over there, but just a few more things. One is, what products are you planning to be more aggressive on going forward, and where are you being more cautious? That's one. And second, the disperse number being lower, is that just seasonality, or can it be attributed to any other reason?

So, I'll take the second question firstly. On the disbursement, on a QOQ basis, it is actually the seasonality because March typically is very high, plus there is an element of co-lending or partnership-led, let's say, disbursements that kind of come through. But at an organic level, I think we continue to be quite similar levels this quarter as well. If I were to, however, bring your attention to the YY growth in disbursements, that is actually close to 30%. So, you're quite looking at continuing to focus on growing the disbursements because we know it is a matter of time before the disbursements will start. That's resulting into the book growth, because right now the runoff factors are also there, but as the runoff starts tapering, because we had slowed down the loan book between 23 to 24, 25, right, we started slowing that down. So as the runoff starts slowing down, these disbursements will start, you know, also, you know, resulting into book growth, and we do believe, I think, that's about three to four quarters from now, that we should be able to deliver a double-digit growth as well.

Okay, perfect. Thank you so much. And regarding the product strategy within detail?

So, from our side, there is a multi-product. So, A, to begin with, when you think about us, you know, you have to think that we are all-weather universal structure. It's not that we are dependent on any particular product. When retail has been slower, we have the ability to work through the corporate engine or the commercial banking engine. Likewise, within retail, we also operate with multiple products. Therefore, it's also sometimes a function of where we see these growths tapering off. For example, personal loans, we had slowed down quite meaningfully over the last two years. But we are now again growing that book. But there are certain channels through which we are growing faster than other channels, right? So I think that's one part. The second, there are certain products like LAP, you know, where we will continue to, you know, do because we did well in the past and it's a growth, it's a product that will continue to grow. Then, there are products that we are now calling it as franchise products, where as and when our customers will need, let's say, a home loan or an auto loan, I think these will be products that we will also be willing to offer to these, right? So you combine all of this. And add to it the fact that we also have co-lending structures in place, you know, it is going to be quite diversified from, let's say, the product mix. I think certain guardrails with which we operate is, for example, the secured-unsecured. So we will not allow a whole lot of unsecured to be a dominant part of this. So, typically, let's say it's a 75-25 ratio, we will ensure that 75% secured versus 25% unsecured kind of retail, right? So, I think that's really the broad theme. So, I don't, you know, I'm not sure if... So, you got the gist of the answer, but I think it will continue to remain largely diversified.

Okay, perfect. Thank you so much for answering all the queries and wish you the best of luck going forward. Thank you. Thank you so much.

Thank you. The next question is from the line of Rama Subaradi, an individual investor. Please go ahead.

Yeah, very good evening, everyone. So, my question is, like, recently, Borda's approved the capital rise of 16,000 crore, where 10% equity dilution, right? So, how do you ensure that the existing shareholders will not be impacted with that kind of capital in the future? Because if you see earlier, right, we were like, okay, basically you have given a lot of discount for the new shareholders such as PE investors, right? And even SMBC also, they got in good price. So in future, when you are raising this equity, so how do you ensure that existing shareholders not going to impact it? Because we have been staying for the last six years, and we have not paid any dividends, right? And still we are expecting the bank will deliver the good numbers and been waiting for so many years. And, you know, you have to take care. So, that is my concern. So, can you please address?

Good afternoon, sir. Thank you very much for the question. And first and foremost, sir, thank you very much for being a patient supporter of the bank. Over the last many years, our objective clearly has been to solve for what we think is the right strategy and the right quality of the bank, and you would see that over the last two to three years, the performance of the bank has continued to improve. We had always stated that the bank will deliver an ROA to exit FI26 with 1%. I think we've delivered that as well, and there are clearly signs of sustainance that's playing out as well. Now, as the bank continues to grow, there will be need for capital, because when we compare our core equity ratio compared to others, the other banks are also higher than us. Bye. There are going to be levers that the bank will continue to use to make sure that we are not compromising or it is not coming at the cost of shareholder value. I think that's also an important factor that we consider when we think through elements of capital. Having said that, what I want to clarify, which I did in one of the previous questions. This resolution is an enabling resolution that we are seeking. This was a resolution that was also approved by the shareholders last year, and we are only refreshing that enabling resolution. This resolution only gives the bank the optionality. To trigger a capital raise in the event, we believe that the raise is going to be beneficial for the bank, for its growth, and ultimately for creating value for its shareholders. And that's really the objective with which we have gone about taking this resolution.

Thank you.

Thank you, Ritikharu. Thank you. Thank you.

Our next question is from the line of Sunil Choksi with Indus Equity Advisors. Please go ahead.

Congratulations on stable result. Sir, I have a little different question than normal analyst would ask. Prospects for India, Japan businesses are getting better every day. Infrastructure finances, Japan is taking a big lead in India, be it bullet train. Maybe in our shipbuilding, many other aspects. Trade is concerned. India is likely to do much better with the country. And there are certain other specific government-related industry like defense and many other aspects also taking place. Can you throw some light that being a preferred partner in our bank, we have some scope of business growth in the Indo-Japanese business corridor.

Yeah. Thank you, Chokshi sir. Thank you for this question, which you said is a little different to what normally we get in the NLS meet. See, couple of things which we observe now is that the Indo-Japanese corridor itself is getting strengthened, right, year after year, and particularly after the recent meeting, inter-government meeting which happened and also between the prime ministers as well as the trade teams. We see a lot of traction happening, much more than what has been seen in the last few years, I would say. Right? And now, with also the agreements that are in place, the corridor gets busy, that's for sure. Now, the aspect of how we would be leveraging our partnership with SMBC is something we have already started working upon. We already have some MOUs in place, and eventually our endeavor is to get the max. That happens in this, if I may put it this way, the corridor between these two countries should happen through our bank. So this is our endeavor and that's what we are already working towards. And there are certain specifics which at this point of time I am not able to mention because of. Confidentiality reasons, but otherwise we are very strongly working on these aspects. Be it trade or be it investments, or what you rightly said that there is a lot of infrastructure investments that is coming in from Japan into the Indian projects. Right? And there is also a lot of interest that is seen from the Japanese corporates. Establishing some project of the other in India, built in the form of a wholly owned subsidiary or a joint venture, or even some distribution channels out there. I hope that answers.

Yeah, yeah, that answers. At least there is some visibility visible.

Definitely, definitely, definitely.

Thank you, sir. Thank you, sir. We have a... Very good partner where the Government of India new scheme for FCNRB led by RBI is visible. I am quite sure that we should be doing well because people tap Japan very often for the ease and the rate. No doubt the Japanese are looking upward tragically right now. In FNRB, we should be doing much better than most of the other banks. I had missed the question because there were too many calls at the same hour, so pardon me for that. Sir, any color which you think you will do on a leverage trade or a trade deposit?

Yeah, so, in fact, yeah, you are right that this question had come up in the earlier part of this, but then we, what we are looking at is max leverage of 9x this time, at this point of time rather, right? So we will perhaps be sticking to that, and we are doing, we are seeing a lot of interest that is coming in from various geographies, and one of which is towards the east also. And now, whatever limits we had for the leveraging, one aspect is of course getting the deposits, right, the straight one is to one sort of a deposit, yeah, the pure play of CNRP deposit. That is something which we have absolutely no constraint we are getting quite a bit, which happens in our branch banking franchise. The leveraging part is something which we are also looking at fairly strongly and we see a good growth that has already happened. And further growth will depend on the limits which we get from some of our partners or the foreign banks. Thank you, Chokshi, sir.

Thank you, sir. Thank you for answering all my questions and good luck for the year, sir.

Thank you so much. Thank you so much.

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.

Thank you very much, and to all the participants in this call also, I would like to convey our sincere appreciation for coming in and joining us, knowing fully well that today is a day of many bank results that are coming up. Thank you very much.

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.