Yes Bank Q2 Results: Net Profit Up Sequentially Even As Provisions Rise

Yes Bank Ltd.'s profit rose sequentially even as the private lender set aside higher provisions in the second quarter.

The bank reported a net profit of Rs 129 crore for the quarter ended September, up from Rs 45 crore in the preceding three months, according to its exchange filing. The lender had reported a loss of Rs 600 crore a year earlier. The profit was aided by a fall in operating expenses.

Net interest income, or core income for the bank, rose 3.4% over the previous quarter to Rs 1,973 crore in July-September. It had reported an NII of Rs 2,186 crore a year earlier.

Total income rose 6% quarter-on-quarter to Rs 2,680 crore, while operating expenses dropped 4.5% sequentially to Rs 1,320 crore. This helped the bank improve its operating profit to Rs 1,360 crore, up 18.6% from Rs 1,147 crore in April-June.

Provisions stood at Rs 1,187 crore in the second quarter, up from Rs 1,087 crore in the preceding three months. The bank stepped up provisions against the Covid-19 pandemic and has in all set aside Rs 1,918 crore. That includes Rs 642 crore worth of provisions against the pandemic in April-June.

Yes Bank's asset quality improved with gross non-performing asset ratio as at 16.9% as of September compared with 17.3% as of June. Net NPA ratio dropped by 25 basis points quarter-on-quarter to 4.71%.

“The total loan amount which would have slipped to NPA category if the Supreme Court order was not in place would be Rs 2,391 crore,” Prashant Kumar, managing director and chief executive officer, told reporters over a conference call. He was referring to the compound interest case being heard at the Supreme Court, which has asked lenders not to downgrade accounts to NPA after Aug. 31 till the case is resolved.

As on Sept. 30, total loans were repayments were overdue for more than 60 days stood at Rs 4,060 crore, while loans overdue between 31 and 60 days stood at over Rs 2,000 crore, Kumar said.

Since the bank completed its Rs 15,000-crore fundraise through a follow-on public offer in July, its capital adequacy ratio rose to 19.9% as on Sept. 30, from 8.7% in the preceding quarter. The funds helped Yes Bank improve its Tier-1 capital ratio to 13.5% at the end of the second quarter from 6.6% as on June 30.

• Total advances fell 2.6% year-on-year to Rs 1.67 lakh crore in July-September. According to Kumar, this was largely because saw its corporate loan book fall.
• The bank disbursed around Rs 3,500 crore worth retail loans during the July-September period.
• Yes Bank’s investment portfolio as on September 30 stood at Rs 11,960 crore. Of this, 54% is still classified as non-performing.
• Total deposits stood at Rs 1.35 lakh crore at the end of the second quarter, up 15.7% quarter-on-quarter.
• Current account savings account ratio fell to 24.8% from 25.8% in the previous quarter even as the bank bank opened 1.5 lakh new retail accounts in July-September.
• Retail term deposits, or fixed deposits, rose to Rs 59,800 crore from Rs 48,000 crore as on June 30.