Yes Bank · Material risks, their source context, and severity in the latest available quarter.
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Risk intelligence
FCNR deposits have not picked up as fast as expected due to higher global borrowing spreads and risk review processes at international banks. Management noted geopolitical factors and the time-consuming process of setting up 3-5 year risk limits across institutions. This could impact low-cost deposit mobilization.
Management acknowledged ECL (Expected Credit Loss) normalization is coming but stated it will not be very material. However, SR-related ECL adjustments will flow through P&L as SR ECL adjustments are no longer allowed in the balance sheet. Combined impact with new capital adequacy circular on credit risk weights being assessed.
An analyst specifically asked about a pending court case and whether there are any provisions or adjustments to financial statements. Management confirmed no provisions have been made and stated the enabling capital approval is not linked to the court case outcome. However, the court case itself remains unresolved, creating regulatory/legal uncertainty.
Advances grew 18.3% YoY while deposits grew 14.3% YoY, creating a CD ratio concern. While management emphasized daily average balances show stable CD ratio, the system-wide deposit constraint means liability franchise growth remains critical. Intensive deposit competition could pressure margins if deposit repricing lags.
