Yes Bank Q3 Results: Posts Rs 150-Crore Profit But Bad Loans Surge
Yes Bank Ltd. posted a profit in the quarter ended December as net interest income rose, offsetting an increase in bad loans and provisions.
The private lender’s net profit stood at Rs 150.7 crore compared with a loss of Rs 18,560 crore a year ago, according to an exchange filing. The consensus estimate of analysts tracked by Bloomberg pegged the net loss at Rs 4,815 crore.
Net interest income, or core income, for the bank jumped more than twofold over the year earlier to Rs 2,560.4 crore, compared with the Rs 1,969-crore forecast.
The bank’s gross non-performing asset ratio stood at 15.36% compared with 16.9% in the July-September quarter. Net NPA ratio as on Dec. 31 was at 4.04%, down 67 basis points over the preceding three months.
However, the pro forma gross NPA ratio rose to nearly 20%, according to Prashant Kumar, chief executive officer of Yes Bank. Under directions from the Supreme Court, banks have not been tagging bad loans as non performing assets since Aug. 31, 2020.
Provisions during the quarter stood at Rs 2,198 crore compared to Rs 1,187 crore in the previous quarter. Yes Bank holds aggregate provisions worth Rs 2,683 crore for Covid-19 related accounts.
“The proforma numbers are looking large as compared to where we were in March 2020, because we have reduced our loan book in the last few quarters. We believe that the Covid-related provisions that we hold should be enough to cover any losses,” Kumar said.
The bank invoked the Reserve Bank of India’s one-time restructuring scheme for loans up to Rs 8,062 crore. This included accounts which were classified as standard owing to the Supreme Court’s instructions and accounts which saw delays in repayments owing to the Covid-19 pandemic.
The bank’s net advances rose 1.7% quarter-on-quarter to Rs 1.69 lakh crore. As of December 31, the bank’s corporate book stood at Rs 88,364 crore, retail advances were at Rs 47,115 crore, while micro, small and medium enterprise loans were at Rs 33,974 crore.
Yes Bank’s total exposure to debt instruments issued by companies stood at Rs 12,512 crore as of December 31, which included 52% non-performing investments.
“Our expectation is that we will see a 10% aggregate credit growth next financial year,” Kumar said.
Total deposits rose to Rs 1.46 lakh crore, up 7.7% sequentially. This included savings account deposits worth Rs 21,100 crore and current account deposits worth Rs 15,900 crore. Retail term deposits contributed Rs 45,800 crore to total deposits.
The bank’s board also voted in favour of raising funds worth Rs 10,000 crore through various routes, including share sale, depository receipts, convertible debentures, bonds, etc. In July 2020, the bank had managed to raise Rs 15,000 crore through a further public offer.