Yes Bank reported a net profit of Rs 231 crore for the October-December quarter of 2023-24, 349.70 per cent higher Rs 52 crore figure in the same period the previous year, which was significantly impacted by provisions made for the transfer of sour loans to an asset reconstruction company.
In the preceding September quarter, Yes Bank’s net profit stood at Rs 225 crore. The core net interest income grew by 2.3 per cent to Rs 1,971 crore in the reporting quarter, driven by an 11.8 per cent growth in advances and a slight narrowing in the net interest margin to 2.4 per cent. The non-interest income increased by 12.1 per cent to Rs 1,195 crore.
Total net income for the third quarter of FY24 grew by 5.8 per cent to Rs 3,211 crore compared to Rs 3,036 crore in the same period the previous year. Deposit growth for the quarter was at 13.2 per cent. The bank’s managing director and chief executive, Prashant Kumar, highlighted the need to ensure that the deposit base keeps growing to sustain credit growth of around 15 per cent.
Asset quality
On the asset quality front, fresh slippages were Rs 1,200 crore, with over Rs 1,000 crore coming from the retail sector alone. The gross non-performing asset ratio remained stable at 2 per cent. The bank has recovered Rs 3,800 crore of assets in the first nine months of the fiscal year and aims to surpass its Rs 5,000 crore recovery target for FY24.
Given regulatory concerns about unsecured lending, the bank has adjusted its underwriting practices to be more cautious. However, Kumar stated that this stance would not impact overall loan growth.
The higher risk weights on unsecured lending had a 0.40 percentage point impact on capital buffers, with the core buffer at 12.6 per cent as of December 31, 2023. Kumar noted an anticipated accretion of up to 1.10 per cent in the capital level by June 2024 as warrants get converted.
The bank’s management mentioned that the Reserve Bank of India’s move on exposures to non-bank lenders did not lead to any changes in policies, and these exposures also help achieve priority sector lending targets.
Yes Bank’s overall investments in alternative investment funds stand at Rs 12.5 crore, fully provided for, according to Kumar. The bank grew its large corporate book for the first time in the December quarter after a period of scaling it down. Kumar indicated that the trend of degrowth in the large corporate book is over.
(With PTI inputs)
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