Yes Bank Limited ($YESBANK)

Ladies and gentlemen, good day, and welcome to Yes Bank's Q4 FY '26 Results Conference Call. On the management panel. We have with us today Mr. Vinay M. Tonse, Managing Director and Chief Executive Officer, Yes Bank; Dr. Rajan Pental, Executive Director; Mr. Manish Jain, Executive Director; Mr. Niranjan Banodkar, Chief Financial Officer; and Mr. Sunil Parnami, Head of 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. [Operator Instructions]. Please note that this conference is being recorded. Participants are requested to ask questions pertaining to the bank's Q4 FY '26 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 Tonse. Thank you, and over to you, sir.

Yes. Thank you very much. And at the outset, our apologies for getting into this meeting a little late. We got stuck in some other meetings to this since the apologies for that. But formally to start, good afternoon, everyone, and thank you for joining us for the Yes Bank Q4 and Full Year FY '26 Earnings Conference Call. While I have interacted with many of you in my earlier role, this is my first earnings interaction as the MD and CEO of the S Bank, and I'm very pleased to join you today, along with my senior leadership team. And I also look forward to building a long-term engagement with all of you. As part of my opening remarks, I will briefly cover my first impressions of the bank. Our take on the current operating environment and key highlights of our quarter 4 as well as the full year FY '26. But at the outset, I would like to express my sincere appreciation for Mr. Prashant Kumar, my predecessor. Over the past several years, he led Yes Bank through a multiyear and truly unique transformation. This leadership was pivotal in stabilizing, strengthening and also reanchoring the institution. I must also bring in here mention of the strong support of the government of India, the Reserve Bank of India and the State Bank and other banks who bought in together to bring in the reconstruction of the Yes Bank and also, last but not the least, the Board of Directors, which guided us during this period and also our customers and employees who are a huge source of strength for us. Thanks to these collective efforts, the bank, I now have the responsibility to lead stands on a very stable foundation. Even in challenging periods, -- the Yes Bank brand remains relevant and trust was rebuilt gradually through steady execution. Today, the bank operates on a stronger base with resilient asset quality, a more granular franchise a strengthened deposit engine and renewed stakeholder confidence supported by strong shareholders such as SMBC, SBI and Advent International. Over the last few weeks, I have spent meaningful time across teams and functions, listening, understanding and also observing the nuances of how this bank operates. My early interactions have highlighted the steady commitment of the Yes Bankers who have been supportive through challenging periods and contributed to restoring confidence. I've also seen a strong alignment of purpose across all the stakeholders. That's amongst employees, customers, regulators, the Board and investors, which is very reassuring for the path ahead for us. Alongside this, our modern technology platform the leadership in digital payments ecosystem we have and collaborative embedded banking capabilities provide useful strengths as we enter the next phase of growth. Going forward, we will build on what is working well, strengthen areas that require more attention and pursue growth that is thoughtful, calibrated and also sustainable. Execution, discipline and stakeholder trust will remain central to how we operate. Looking ahead, we will continue to invest steadily across 4 basic areas our people, our products, our processes and technology platforms. These remain important to strengthening the bank over time. We will also keep building on the power of one Yes Bank to ensure a consistent customer experience across businesses. In addition, our ongoing collaboration with SMBC provides helpful strategic support particularly in corporate and cross-border banking. Now let me talk about the macros as they are evolving. We are closely observing the fast evolving global environment, including the AI landscape and the geopolitical conflicts impacting global growth, supply chains, energy and freight costs and also the inflation and interest rate trajectories. Against this backdrop, India remains competitively resilient, supported by steady domestic demand and a stable financial system. As a bank, we remain attentive to these trends and the potential implications for our businesses. So the third part now, I would now share some of the key highlights of our quarter 4 and also the full year FY '26 performance. Despite the ever evolving macro environment, the bank closed FY '26 with stable and improving financial performance, underscoring our progress on profitability, productivity and balance sheet quality. For the full year FY '26, net profit stood at INR 3,476 crores, up 44.5% over FY '25. The net profit of INR 2,406 crores supported by continued improvement in our operating performance. And ROA for the full year was at 0.8% versus 0.6% in FY '25. Number two, for the quarter 4, the bank reported a net profit of INR 1,068 crores, reflecting a strong growth of 4.7% net profit over the net profit of INR 738 crores in the corresponding quarter of the previous year. In line with our guidance, bank reports per ROA for the quarter of 1%. Number three, talking of our net interest income and NIM. NII for the quarter was INR 2,638 crores, which was up 15.9% Y-o-Y. Despite adverse interest rate environment and elevated competitive intensity in deposits, our NIM saw an improvement of 10 basis points quarter-on-quarter and 20 basis points year-on-year and came in at a number of 2.7%. Even for the full year, the NIM at 2.6% improved 20 basis points vis-a-vis FY '25 and in line with our guidance even in Q4 of FY '25. Our margin improvement was supported by multiple factors, namely front loading of our deposit repricing that happened last April, continued outperformance in CASA and sustained reduction in high-cost borrowings, mirroring continued rundown of the RIDF and PSL-related mandated deposits. Net interest income for FY '20 at INR 9,776 crores, grew 9.3% year-on-year. In line with our guidance in FY '26, the bank had a second straight year of 100% compliance in PSL and all of its subcategories, which resulted in notable reduction of RIDF and other mandated deposits to total assets vis-a-vis 9% as at the end of FY '25. That was 6% now against 9% last year. The bank continues to see a gradual increase in its organic accretion of PSL across subcategories. Going forward, the bank remains well on track to reduce these deposit balances to below 5% by fiscal 2017, which will aid our margins and profitability. As regards to the noninterest income, the bank saw continued momentum across all diverse and granular fee income streams. Noninterest income for the FY '26 at INR 6,759 crores, grew 15.4% year-on-year, driven by healthy traction in retail fees, SME and commercial banking fees and also on the back of a strong transaction banking performance. We continue to strengthen our fee momentum by deepening client engagement, improving the cross-sell intensity in wholesale banking and scaling our digital fee engines. This includes driving higher penetration of products care and CMS flows within our corporate relationships, while broadening retail fee contributions through preapproved programs, cards, payments and wealth offerings. Over the last 3 years, the bank has seen a meaningful increase in its noninterest income to average assets ratio, which has increased from 1.1% in FY '23 to 1.5% this year FY 20. Cost-to-income ratio for FY '26 also saw a big improvement to 66.7% versus 71.3% in FY '25. SP307264873 That's 66.7% now versus 71.3% last year. The exit for the financial year came in even lower with the cost-to-income ratio coming at 63% resolving 66.1%, Q3 FY '26 and 67.3% the same quarter last year. The decline has been in line with our broad guidance to gradually keep bringing down our cost in combat and we expect the momentum to continue. Improving core profitability remains a central theme for us. For FY '26, the bank had a PPOP, pre-provisioning operating profit of INR 5,506 crores, which grew 29.4% year-on-year. FY '26 PPOP as a percentage to average total assets improved to 1.2% in versus 1% for FY '25 and 0.9% in FY '24. The PPOP for the quarter was INR 1,618 crores up 23.1% year-on-year, supported by income growth outpacing expenses growth, reflecting sustained expansion in our operating jaws. Asset quality remained strong during the quarter. As at 31st March '26, the bank reported gross NPA and net NPA of 1.3% and 0.2% respectively, the lowest ever that we have seen in the last 24 quarters and amongst the top quartile in our peer set. Sequentially, the GNPA and NNPA ratio improved by 20 and 10 basis points, respectively. Further, the provision coverage ratio, the PCR, continues to remain healthy at 81.9%. The resolution momentum remains strong. The bank had total recoveries and upgrades of INR 4,795 crores in FY '26, which included recoveries from security receipts of a little more than INR 1,550 crores against our guidance of INR 1,200. In line with the rundown in the face value of the security receipts, we expect recoveries to the INR 800 crores to INR 1,000 crores from SRC in FY '27. The bank continues to reduce its over exposures. -- strengthen early warning mechanisms and announce the underwriting standards and the collection infrastructure. Gross slippage ratio in FY '26 has improved to 1.8% versus 2.1% last year. This has been led by improvement in the retail asset slippages, which improved in FY '26 to 3.5% from 4% in FY '25 with the exit rate even lower at 2.8%. Quarter 4 this quarter 4 versus 3.4% in the last quarter. Retail slippage for Q4 at INR 888 crores is at its lowest in the past 9 quarters with improvements visible across both secured and unsecured products. Together, these trends underscore the resilience of our asset book and the effectiveness of our ongoing credit risk management efforts. Overall credit costs remained low at 0.2% for the full year FY '26 versus 0.3% last year. Credit costs were -- the Q4 was at 0.17%. Now moving over to the balance sheet highlights. Growth saw a marked uptick during the quarter, aided by acceleration across business segments. Total advances registered a growth of 11.1% year-on-year to INR 2.73 lakh crores. Retail disbursements in particular, have gained significant momentum, registering 41% year-on-year growth in Q4 FY '26. We remain focused on balanced and profitable growth across retail, commercial and wholesale businesses, supported by disciplined risk selection and effective crisis. We crossed 2 critical milestones in our deposits franchise during this quarter. While overall deposits crossed the milestone of INR 3 lakh crores, the CASA balances crossed the milestone of INR 1 lakh crores. Total deposits increased 12.1% year-on-year to INR 318, 000 crores with a strong contribution from retail and branch-led deposits which grew 13.5% year-on-year and comprised 58.4% of the total deposits. CASA balances grew 14.9% year-on-year to INR 1.12 lakh crore and even on an QB basis, the CASA growth was strong at 11.2%. And the CASA ratio also improved 80 basis points year-on-year and 110 basis points Q-o-Q to 35.1%, stands over 35.1%. Strengthening of the liability franchise remains a priority for the bank. We are working to reduce the reliance on the bulk savings bank balances, improving branch lead and digital-led acquisition funnels enhancing customer journeys and sharpening the pricing strategy, ensuring competitive positioning without compromising stability. Continued improvements in digital onboarding, the KYC processes and our productivity have enabled us to capture higher primary banking share from our target customer segments and are the key drivers of our continued outperformance to the industry in CASA. Our credit to deposit ratio, the CD ratio improved to 85.7% from 88% in the Q3 FY '26 and 86.5% in Q4 FY '25. Our capital adequacy and liquidity levels remain comfortable to support the growth aspirations of the bank going forward. A few other updates from our site. I'm pleased to welcome on board Mr. S. Anantharaman, as the Chief Fisk Officer of the bank. He is an industry return with over 3 decades of experience with rich experience -- rich expertise in risk management domain. We also opened 82 new branches during the year, which was in line with our guidance at the start of the year. Our ESG ratings, which are already the best in the banking industry in India, continue to see improvement across agencies such as S&P, FDIC and the ISS stocks. Yes Bank also has been recognized as a great place to work for the fourth consecutive year. The bank has rolled out a new business offering in the form of S Grande, which is the premier banking switch developing and delivering business solutions. -- digital integration and operational benefits for modern enterprise. To conclude, as we enter FY '27 with stability and renewed momentum, we will be continuing to invest in our people, products, processes and technology, deepen customer relationships across segments, focus on building a future rated bank with very strong resilience. And finally, I thank you once again for joining us today. We can now take questions. Thank you.

[Operator Instructions]. Our first question comes from the line of Jayant Kharote from Axis Capital.

Congratulations on the good set of results. The first question will be going ahead given that it's been a short stay profile, but how are you looking at growth in the bank for the next 10 years? Is there anything you're waiting for to accelerate in terms of any of the balance sheet metrics? Or you think we can start doing for that 15% plus growth firstly on that? And second, of course, is that if you could help us with the average CASA growth in Q2. And compared to the loan goods made from CASA end up despite the rate cuts. But how do we sort of grow that in line maybe in like 14%, 15% on an average basis. So how do you address that probably, at least 2 questions.

So I'll start with the CASA growth on the average basis. So on a -- both CASA have sequentially grown in the range of -- in fact, a 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 a bit picture at about 4%. So if I were to characterize the growth for Q4 gross deposits, it's broadly anchored around 4% CASA and TD. So I think we're kind of maintaining the CASA ratio at least from an average performance 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, we're talking about average Q4 '26 to average Q4 25. So that's on deposits. You had a question which you started with was on next year's growth. And you'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 momentum -- the sequential momentum is giving to quite accelerate. And that's kind of ending up with a reported number of 11% on our Y-o-Y basis for advances growth. We do believe that, 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 move fast now, given that we now have confidence on the asset quality and profitability. But having said that, the book is related 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 broadly anchors around the 14% to 15% range.

Sir, if I could just squeeze in 1 last question on the margin. This RIDF rundown has been quite healthy last year. Going into next year, should the trajectory on margin expansion continue Q-o-Q or or could we see this Yes Bank ended?

So on a year-on-year basis, Again, some of the rundown that we had in R&D this year also were more heavy from an H2 perspective. So to that extent, FY '27 comparison to FY '26, even if it is year ended, should have no material bearing. But there is a rundown plan. So we ended this year at about INR 27,900 ballpark INR 28,000 crores. We think that next year, -- at the minimum, the reduction should be about INR 6,500 crores, that would also go as high as INR 9,000 crores by the end of March '27.

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

Congratulations on a good quarter. Sir, first question is on your growth mix, right? So we have done -- I mean, we have achieved 1% ROA asset quality seems to be holding up reasonably well. But retail slippages, while they're improving, they're still 2.93%. And we see that the 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 discharge any change in the loan mix between retail, wholesale, commercial as you move towards industry level growth. So that is the question number one.

So on the growth mix, I think important to note is the retail disbursement growth because that's really an important control label 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 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%, 11% is what to 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 let I think the momentum is playing out as we are exiting fiscal '26 is quite secular across all segments. And that therefore gives us the confidence to to start delivering 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%, 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.

Sure. That is very helpful. And on the treasury, the bonds, the G-Secs had spiked in during the quarter, they ended at more than 7% at quarter end. Do you have any NPL on investment book or if you can specify was there any MTM loss either in the P&L or in DFS results? Or was there any offset?

Sure, Jai, I will take that. So as a market philosophy, we don't run very high open risk through a trading book, whether it's bonds or project metal even FX while you've not asked, I can also confirm that when the FX because of some of the changes that came through regulations not had any material bearing on our mark-to-market because there's a philosophy, we don't run quite large trading position on markets. On -- however, yes, we do acknowledge that the yields did go up, and that has had a bearing on our -- the minimum [ master ] maintenance book, which is largely parked in the HTM. But we do also note that these have come off from the reporting period of March. So we will wait and watch how the teams 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 CET1 computation for December. And you will see that our CET1 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.

Right. Niranjan, if you have the number for AFS reserve, let's say, Q3 and maybe the part that will give some sense on what was the movement in the AFS results?

In terms of the absolute value?

Yes, yes.

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

And all the...

Yes, would be about INR 200 crores.

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?

No, 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 this quarter, which was in the range of INR 450 crores. The second is we've also had one corporate assets that got resolved, which was 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, right? Now these were like the 3 material contributors to provisioning buffer that we have that we kind of -- we -- that 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 CCR in the range of 80% plus now for the last 3 quarters, right? And we've always stated objective to be quite high from an NPA standpoint coverage, right? 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 Q4 of this year, which translates to INR 31 crores. I want to be emphatically clear here that the provisioning that we have done on certain, let's say, products or segments in no way reflect an underlying credit issue or an impairment or view about that sector. It is just what we thought was prudent in terms of -- and just being proactive in terms of taking more.

Understood. And sorry, I have 2 more questions. I can ask now or maybe I can -- I mean if you now I can take them now also.

Okay.

So yes, sir, on ROA trajectory, now we have achieved a 1% ROA adjusted for labor code last quarter and this quarter maybe more than 1%, if I as is the INR 40 crores contingent provisioning. What is the next milestone where you had hinted that growth you would aim at similar to system -- how would you look at ROE trajectory because NIM seems to be having some tailwinds and asset quality, anyway have a reasonably good tailwind. So what would be next stop or maybe exit FY '27 or maybe full year FY '21, if you can then provide some color there.

It's, again, something that we've been saying we will want to exit FY '26 with a 1% ROA. And as you rightly pointed out, I think we are now beginning to deliver that more consistent in December also being it adjusted for the gratuity cost. Now I would say that directionally having achieved this, of course, there are 2 important levers. One is sustainance of this, is what we have to make sure we are driving. And the important contributor to the sustenance and improvement from here 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 benefits that we will get from the JP Class 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 are -- which can get redeemed over the next 2 quarters. So that -- what we have to do over the next year or a year, year or 2 is really make sure that we have the core ROA construct to offset that, not only offset really expand from our 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 Flowers benefits keep coming in, which we are indeed expecting even should play in FY '27 that further patch to our performance.

Right. Sure. And lastly, if you have the number for credit card slippages and maybe PL slippages, it looks like they're clearly improving. But if you have the number in at INR 2 crore, I think last quarter was some INR 13 crores for credit card and around INR 140 crores per PL, and that will be very useful.

We'll pull that out. I think maybe we might have interchanged the numbers from the record book. The credit card was about INR 133 crores and personal loans was about INR 150 crores. So that INR 186 personal loans is down to about INR 160 crores. And credit cards has continued to be in the range of about INR 135 crores to INR 140 crores.

[Operator Instructions]. Our next question comes from the line of Advait Bate from Go Digit Life Insurance Limited.

Can you hear me?

Yes, please.

Congrats on good set of numbers. A few of my questions have been already answered. I had 1 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. -- wanted to understand how the contribution of retail disbursement has been for the quarter from branches. And as we move to the next leg of growth, how are we looking at branch expansion, which locations you are prioritizing and how that aligns with the loan subsegments you are trying to prioritize growth in.

For your question. So we have paid 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 at with that plan depending on if there is any upside available to do that. That is point number one. Point number 2 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 to the branch customers. So -- and we would like to -- we would see this actually growing going forward. There have been some calibrated growth strategy on the unsecured loans and now with the new rule insurance 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, where we look at the branch expansion, we typically look at 3 points. One, what is the deposit growth happening in and around that in code. Second one is how is the credit growth happening? And third is how the quality of credit growth available in and around that time. So these are largely the 3 broader points we keep in mind, if any selection of a branch location.

Got it. Got it. That's helpful. Just one quick follow-up question on an earlier question asked on you did give out the rundown trajectory for the next 1 year. wanted to understand how the mix would look like after when would the decline be sort of linear? Or would it be accelerated post 1 year?

So the reduction of RIDF from here on will -- so for example, FY '28 and '29, will be equally split and then there are some maturities. So I would say it starts getting thinner in terms of the base of production. So '28 will be similar to '27 potentially, but '29, '30 will start getting in.

[Operator Instructions]. Our next question comes from the line of Dave Day from Horsepower Securities.

Congratulations on excellent set of numbers. Yes. It seems that the performance has been improving quarter-on-quarter and it's very pleasant to be part of your story. So now my question is by the next year, what is your target balance sheet size in terms of loan book. Yes, in terms of loan book size, what would be the target by the end of next year.

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 it should be in the 13% to 15% range.

What percentage, I missed it. Sorry.

13%.

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

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

9 point?

9.2%.

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

So hearty congratulations Vinay sir, for becoming a new MD and CEO of Yes Bank. The numbers have been very good I mean, yes, the NPA asset quality and also now deposits like 2020, where we were under 2026, it's like 3x of growth very good. And also like the profit is also looking promising like last year, like whatever management made it that ROA expected to 1%. So basically, my question is like -- so this ROA like I mean, '27, '28; 29 the upcoming years. So I think we hope we maintain 1% ROA and also like on top of that number will grow quarter-on-quarter on the yearly basis. Can you describe on that so that we will have good confidence, whatever we built so far, we will not lose the momentum.

Thank you very much, sir. And thank you for being quite supportive on the banks, so we really value that. Thank you for that. On the question on ROA, we've said this that March '26 will look to exit with a 1% ROA and I did also you to that in my previous response, I think most important thing is now to sustain this 1% ROA. Of course, there are -- there is a play that we also have from provision write-back of JC Flower ARC. But what we have very emphatically worked upon internally is to say internal outside of the JC FLower 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 them cost and continuing the credit cost as well. So really, that is our endeavor. What you've said are exactly our our aspiration and our ambitions as well to not only maintain but to improve over the next 2 to 3 years on the ROA trajectory.

Yes. And even this R&D is reduced now, like earlier, it was like 11%. Now it is significantly reduced. And I hope that this I mean, IDF funds and also like it can improve the loan growth on -- so our NIM also like any target in the next year, like to cross 3% or any guidance, and that sir, like currently 2%.

So on that, sir, we've usually refrained 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 believe that we want to get into a 3.25% to 3.5% kind of a range on -- from a margin perspective. And as you rightly pointed out, our idea 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 -- that our loan spreads are quite disciplined, and there's a lot of goes that we've already done from a cost of funding standpoint. So if you look at our savings account rate over the last one year, we've taken the benefit of the reducing rate cycle to cut our rates by over 150 basis points. So savings account rates which was blended 6% is now well below 4.5%. We've taken another reduction 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 our IDS, 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 the margins. And last year, as the retail growth is now coming back and as the mix starts playing out on the loans as well -- that will also only help us improve the asset advance yields and, therefore, start playing into Marches as well. So we will work hard and to make sure that we are driving each of these sectors to the right direction.

Yes. And last question, is there any plan

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.

Congratulations on maintaining the growth momentum of performance. This is happening. 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.

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 bankruptcy. I would refrain from asking 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 go and allow the judgment.

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

Firstly, congrats on the amazing result. I just wanted your quick view on the restated its impact on the MC segment, given that it's 1 of your key pro-drive -- so where do you see that is planning to continue growing it? And how do you factor distress over there?

Sure. Thanks. So we are proactively monitoring our portfolio, and this is an 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 kinds of strength. 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. But currently, since we have had a good client selections over the years, all our clients have been able to manage this corrective step.

Thank you. Ladies and gentlemen, we will take that as a 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.

Yes. Thank you so much, and I must place my sincere appreciation on record for all the time analysts who could make it today. I know it's -- of course, it's a Saturday afternoon and on. So a very busy day because the other 2 banks also that came in today. I appreciate you are taking time off and then coming and joining us. 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.