Yes Bank Q1 Results: Net Profit Jumps Over Fourfold On Lower Provisions
Yes Bank Ltd. reported the highest quarterly profit since December 2018 as provisions against bad loans fell.
Net profit of the private lender jumped more than fourfold over the year earlier to Rs 206.84 crore in the quarter ended June, according to its exchange filing. A consensus of analysts tracked by Bloomberg had estimated a net loss of Rs 678.5 crore.
Net interest income, or core income, of the bank stood at Rs 1,402 crore, down 26.5% over the year earlier. That compares with the Rs 1,238-crore forecast.
The bank’s non-interest income rose 70% year-on-year to Rs 1,056 crore during the first quarter. This included retail banking fees of Rs 342 crore and recovery from written off accounts worth Rs 249 crore.
Its gross non-performing asset ratio stood at 15.6% as on June 30, 2021 compared with 15.41% as on March 31. Net NPA ratio though fell 10 basis points sequentially to 5.78% at the end of the first quarter.
According to Yes Bank, it had restructured loans worth Rs 4,624 crore as on June 30. That included retail loans worth Rs 13.51 crore and corporate loans worth Rs 4,464 crore.
Fresh gross slippages during the quarter were at Rs 2,233 crore.
Upgrades of bad loans to standard category came at Rs 1,723 crore.
Cash recovery stood at Rs 602 crore.
Total provisions of the bank fell 41% year-on-year to Rs 644 crore during the first quarter. Despite this, the bank’s provision coverage ratio improved to 79.3%. The lender expects its asset quality position to continue improving during the rest of the year.
“We are well on our way to ensure that our recoveries and upgrades will outpace the slippages,” Prashant Kumar, managing director and chief executive officer at Yes Bank, said during a post-earnings call.
Total advances remained flat year-on-year at Rs 1.63 lakh crore.
Retail advances crossed the Rs 50,000-crore mark and accounted for 31% of the book.
Total deposits rose 39% year-on-year to Rs 1.63 lakh crore.
Low cost CASA deposits rose 48% year-on-year to Rs 44,790 crore, with CASA ratio at 27.4%.
The bank is aiming at a 15% credit growth for the current financial year, Kumar said. “This would include 10% growth on our corporate loan book and 20% growth in retail and MSME loans.”
According to Kumar, the bank has started making provisions for continued issuance of credit cards. At the time of the Reserve Bank of India’s action, Yes Bank exclusively issued credit cards on the Mastercard network.
“We have already signed an agreement with RuPay and we are expecting to sign an agreement with Visa by next week. We are expecting to start issuing credit cards in 90-120 days,” he said.
Shares of Yes Bank closed 0.77% higher before the results were announced compared with a 0.2% gain in the benchmark Nifty 50.