YES Bank Q2 net profit down 32.2% to Rs 153 cr on higher provisions- QHN

Private lender YES Bank’s net profit declined by 32.2 per cent year-on-year (YoY) to Rs 153 crore in the quarter ended September (Q2FY23) largely due to ageing related provisioning requirements. The bank had posted a net profit of Rs 225 crore in the quarter year ago (Q2FY22).

YES Bank’s net interest income (NII) was up 31.7 per cent YoY in Q2FY23 to Rs 1,991 crore. Its NIM improved to 2.6 per cent in July-September period, up by 40 basis points from level in Q2FY22.

Asked about room to improve NIM further amid rising deposit costs, Prashant Kumar, the bank’s managing director and CEO said efforts would be to improve margins. He, however, did not give guidance on the target.

The lender’s non-interest income rose by 18.3 per cent YoY to Rs 920 crore during the quarter under review.

Its asset quality profile improved with gross non-performing assets (GNPAs) at 12.9 per cent till September 2022, compared with 15 per cent a year ago. The bank’s net NPAs dipped to 3.6 per cent from 5.5 per cent.

Bank provisions including for stressed assets rose 54.4 per cent YoY to Rs 583 crore in Q2FY23. It made ageing provisions for two corporate accounts. This bulging of provisions was not preparation ahead of transferring stressed loans to proposed Asset Reconstruction Company (ARC), Kumar said in media interaction after results. It has formed ARC in joint venture with JC Flowers Ltd.

The provision coverage ratio rose to 84 per cent for the quarter under review from 78.9 per cent a year ago.

The bank’s loan book grew 11.3 per cent YoY, in September 2022. Its outstanding advances stood at Rs 1.92 trillion as of September 2022. The bank expects to expand its loan book by about 15 per cent in FY23.

The deposits grew by 13 per cent YoY to Rs 2 trillion in September 2022. This was higher than the banking sector deposit growth of 9.2 per cent.

The bank’s total capital adequacy ratio (CAR) stood at 17.3 per cent in September 2022, up from 17.6 per cent a year ago.

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