Yes Bank sees strong FCNR demand; corporate lending surges in Q1
Yes The bank saw strong demand, especially from West Asia, for foreign currency non-resident deposits (FCNR) under the Reserve Bank of India’s concessional clearing window, while corporate lending increased sharply in the June quarter (Q27).
In the post-earnings call, managing director and chief executive officer Vinay Tonse said the bank had capped leverage on its FCNR product nine times and exhausted its initial limits. New limits are expected as banks flock to the program.
“We are seeing sufficient demand,” Tonse said. He declined to disclose mobilization figures or targets but said inflows were “more than my normal market share.” The bank is currently routing flows through its GIFT City unit and also working with Sumitomo Mitsui Banking Corp to provide additional limits. He is in talks with (SMBC).
Corporate loans increased approximately 41% year-on-year, driven in part by increased liquidity requirements of oil and metals companies. Tonse said oil-related growth may be partly one-off due to recent pressures, but he expects broader corporate growth to continue.
“Otherwise, I would see steady growth in corporate accounts in this year’s quarters as well,” he said.
Growth spread across customers and sectors, and the weighted average credit rating of its large corporate portfolio increased from the previous year. The growth was largely driven by the bank’s own product capabilities rather than the SMBC partnership.
Yes The bank’s standalone net profit increased by 34% annually ₹1,071 crore in the first quarter of 2027, while net interest income increased by 17.5% ₹2,786 crore. Advances increased by 18.3 percent ₹2.85 trillion and deposits increased by 14.3% ₹3.15 trillion. Net interest margin increased 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%.
While gross losses fell to the lowest level in 10 quarters, management said there were no signs of stress so far from the West Asian war or monsoon-related disruptions.
The bank aims to grow slightly faster than the industry and the current loan and deposit growth rate is expected to continue throughout the year.
Management also expects margins to improve in the medium term and targets net interest margin at 3.25-3.5%. Rural Infrastructure Development Fund balances are approximately ₹21,000 crore by March 2027 ₹27,000 crore improves current account savings account (CASA) mix and stimulates personal loan growth.
The bank said margins should have an “improving trend” from current levels.
On microfinance, chief financial officer Niranjan Banodkar said acquisition remained “an area of interest” as the bank looks to meet priority sector lending requirements, but added there was nothing it wanted to pursue “at least in the near term”.
