Yes Bank Q2 Results: Net Profit Up 74% On Lower Provisions
Yes Bank saw its net profit for Q2 rise 74% year-on-year on lower provisions.
Yes Bank Ltd.'s quarterly profit rose aided by lower provisions.
Net profit increased 74% year-on-year to Rs 225.5 crore in the quarter ended September, according to its exchange filing. Analysts polled by Bloomberg had estimated a net profit of Rs 119.3 crore for the quarter.
Net interest income, or core income, for the bank fell 23% from the preceding year to Rs 1,512 crore.
Non-interest income at Rs 778 crore for the quarter was down 10.5% compared to a year ago.
Asset quality of the bank improved during the quarter, with gross non-performing asset ratio falling to 14.97% as of Sept. 30, from 15.6% as of June 30. Net NPA, too, fell to 5.55% from 5.78% a quarter earlier.
Yes Bank saw gross slippages worth Rs 1,783 crore, including Rs 750-crore corporate loans.
The bank recovered loans worth Rs 987 crore, of which recovery from written-off accounts stood at Rs 577 crore.
Upgrades during the quarter stood at Rs 969 crore.
Loans overdue between 31 and 90 days fell by Rs 6,000 crore quarter-on-quarter to Rs 5,542 crore.
As of Sept. 30, the bank had restructured loans worth Rs 4,622 crore under the Reserve Bank of India's first Covid window announced in August 2020. Of these, Rs 421 crore worth of loans slipped into the non-performing category, Yes Bank said. Most of the loans restructured under the first window belonged to corporate borrowers.
Under the second Covid restructuring window announced in May this year, the bank recast loans worth Rs 857.6 crore.
Provisions for the quarter stood at Rs 377.4 crore, 65% lower than a year earlier.
Business Growth
The bank saw its advances and deposits grow during the quarter, owing to higher retail business.
Outstanding advances rose 3.5% from a year ago to Rs 1.73 lakh crore. On a sequential basis, loans rose by 5.6%.
During the quarter, the bank saw gross retail disbursals worth Rs 8,478 crore, the highest ever in the bank's history.
It disbursed loans worth Rs 4,576 crore to small and medium enterprises.
Retail and MSME business now accounts for 54% of the bank's loan book.
Disbursals in the wholesale banking department stood at Rs 3,736 crore.
Total deposits rose by 30.1% year-on-year to Rs 1.76 lakh crore.
Current account savings account deposits rose to 29.4% of total deposits in the second quarter, compared with 27.4% as of June 30.
"The loan growth momentum is picking up. We should be able to meet our guidance of 15% credit growth this year," said Prashant Kumar, managing director and chief executive officer of Yes Bank.
While the retail and medium enterprises businesses have continued to show improved loan growth, Yes Bank is seeing pick up in its corporate book too, Kumar said. The bank has recently appointed former RBL Bank official Ravi Thota to lead its large corporate business.
Speaking about its plan to set up an asset reconstruction company, Yes Bank said it had received considerable investor interest. Yes Bank will hold a minorty stake of 20% in the ARC, with the partner holding the rest. The bank aims to announce a partner for the business within 60 days, after which it will seek regulatory approvals. The ARC will take over the bank's entire gross NPA portfolio, Kumar said.