YES Bank net up 50% on lower bad debt provision

YES Bank announced that its net profit in the June quarter increased by 50% to ₹311 crore. Incidentally, these are the bank’s first quarterly results after the release of the Reserve Bank of India’s reconstruction on July 15.

The rise in net profit was helped by a 62% decline in provisions to ₹175 crore and healthy loan growth. YES Bank saw its advances increase by 14%, while disbursements increased by 87% to ₹22,636 crore.

At the post-earnings conference, Kumar said the bank is confident to meet its FY23 forecast of at least 15% credit growth, in which retail and MSME lending is expected to grow by 25% and large business loans by 10%.

The bank’s net interest income increased by 32% to ₹1,850 crore, supported by a 30 basis point improvement in net interest margin to 2.4%.

The bank’s deposits rose by 18% to ₹1.9 lakh crore, with the share of low-cost CASA deposits (current accounts and savings accounts) at 30.8% at the end of June. The bank said it opened 3 lakh CASA accounts in the quarter under review and expects the customer acquisition momentum to continue, helped by the recently launched floating rate FD where it has already acquired more than 14 000 customers.

Asset quality

YES Bank said the decline in provisions for the quarter was largely due to lower slippages of ₹1,072 crore, or 52% lower year-on-year. Slippages for the quarter included ₹619 crore in corporate loans and ₹368 crore in personal loans.

The lender saw loan recoveries and upgrades of ₹1,532 crore, which Kumar said was in line with the bank’s forecast for total recoveries of ₹5,000 crore this financial year.

This will be in addition to the block of stressed assets worth ₹48,000 crore, which the bank has put up for sale to asset reconstruction companies. JC Flowers Asset Reconstruction made an offer of ₹11,183 crore, which the bank accepted as the base offer for the recently launched Swiss Challenge process.

Published on

July 23, 2022

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