Yes Bank Q1 profit jumps 54 pc on low provisions, interest income growth

The slippage included Rs 126 crore from restructured pool, Kumar said, adding this was largely due to one large exposure slipping.

Yes Bank Q1 profit jumps 54 pc on low provisions, interest income growth
The ongoing movements on NPAs and stressed assets front is as per expectation in the normal course of business and does not point to any particular segment showing stress, he said, adding the bank expects 2 per cent slippage in the routine course of business.

Yes Bank on Saturday reported 54.17 per cent jump in consolidated net profit at Rs 314.14 crore for June quarter 2022-23, driven by core income growth and a fall in provisions.

The private sector lender reported a net profit of Rs 310.63 crore on a standalone basis as against Rs 206.84 crore in the year-ago period and Rs 367.46 crore in the preceding March quarter.

On a consolidated basis, its core net interest income grew 32 per cent to Rs 1,850 crore in April-June 2022-23 on the back of 14 per cent increase in advances and 0.30 per cent expansion in the net interest margin to 2.4 per cent.

Non-interest income declined 10.1 per cent to Rs 781 crore, largely due to the reverses in the treasury operations and the bank management said excluding the impact of the treasury impact, the other income was up 35 per cent.

Lower slippages of Rs 1,072 crore as against Rs 2,233 crore in the year-ago period helped contain the provisions, which were down 62 per cent to Rs 175 crore and aided the bottomline.

Gross non-performing assets (GNPA) ratio improved but remained at a very elevated 13.4 per cent. Transfer of stressed loans of up to September 2021 for resolution through the recently announced scheme with J C Flowers Asset Reconstruction Company will take GNPAs down to 1.5-2 per cent.

Managing Director and Chief Executive Prashant Kumar said the bank is confident of meeting its 15 per cent loan growth target in FY23, which will include 25 per cent growth in the retail and small business advances and 10 per cent jump in corporate.

During the quarter, retail grew by 42 per cent while there was a 9 per cent de-growth in the large corporate loans despite fresh disbursements of Rs 5,000 crore, Kumar said.

Fraught with lowest NIMs among peers, the bank management acknowledged that the high proportion of NPAs is dragging down spreads as interest paying assets are less. Once the NPA situation is resolved, NIMs will improve, its group chief financial officer Niranjan Banodkar said, adding that the bank is targeting for the number to be 2.6-2.7 per cent for FY23.

The slippage included Rs 126 crore from restructured pool, Kumar said, adding this was largely due to one large exposure slipping.
The restructured book stood at Rs 6,450 crore. The overall advances unpaid for over 30 days but not NPAs increased to Rs 1,700 crore because of a large infrastructure account for which it has adequate securities, he added. Recoveries and upgrades came at Rs 1,532 crore during the quarter, and the bank is confident of attaining its stated target of Rs 5,000 crore under this head for the fiscal year, Kumar said.

The ongoing movements on NPAs and stressed assets front is as per expectation in the normal course of business and does not point to any particular segment showing stress, he said, adding the bank expects 2 per cent slippage in the routine course of business.

There has not been any adverse impact on the loan demand due to the rate tightening by the Reserve Bank or because of the persistently high inflation, he added.
The bank has mobilized Rs 300 crore of deposits within a month under a newly launched product linked to the external benchmark of repo rate, Kumar said.
There are 14,000 customers who have availed the deposit, making the average deposit at over Rs 2 lakh and a third of the depositors are women.
Its overall capital adequacy ratio stood at 17.7 per cent, including the core equity ratio at 11.9 per cent.

When asked about recent media reports saying some private equity majors are in discussion for a USD 1 billion infusion, Kumar said the bank continues to be chasing the USD 1 billion capital infusion target shared earlier but did not divulge any details on the discussion.

The bank scrip had closed 2.94 per cent up at Rs 14.71 on the BSE on Friday, as against gains of 0.70 per cent on the benchmark.

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