Yes Bank on Saturday reported a net profit of Rs 367 crore for the March 2022 quarter, helped by a heavy reduction in provisions for bad debts, which the private sector lender had to set aside as it recognised legacy stress in the year-ago period.
FY22 is the first full-year profit since FY19, Yes Bank said in a regulatory filing.
The city-headquartered bank ended FY22 with a post-tax profit of Rs 1,066 crore. The lender was bailed out by an SBI-led consortium three years back.
The bank’s core net interest income came at Rs 1,819 crore for the March quarter, which is a rise of 84 per cent when compared to the year-ago period. The net interest margin expanded to 2.5 per cent, while it recorded a loan growth of 8 per cent.
The non-interest income rose 27.9 per cent to Rs 882 crore during the quarter.
The situation on sour assets, which was a prime reason for reporting a loss for the last two fiscal years, also showed an improvement during the reporting quarter, with the gross non-performing assets ratio improving to 13.9 per cent from the year-ago period’s 15.7 per cent.
Its chief executive and managing director Prashant Kumar told reporters that it will continue with the work on asset quality in the new fiscal as well and is targeting recoveries and upgrades of over Rs 5,000 crore in FY23.
Kumar said work on floating the asset reconstruction company announced earlier to house all the legacy bad assets of over Rs 50,000 crore is at an advanced stage and the bank is speaking to potential partners for operationalising the venture by June end.
It is targeting a loan growth of 15 per cent, which will include a 10 per cent expansion in the large corporate book that de-grew in FY22 due to a de-risking strategy adopted by the bank and de-leveraging by companies, Kumar said.
The lender is targeting an expansion in the net interest margin (NIM) will widen to 2.75 per cent for the new fiscal and it will exit the year with the number at 3 per cent in the March quarter, Kumar said, adding that lowering of NPAs, a four percentage point increase in the share of small-ticket loans to 64 per cent, and a higher share of the low-cost current and savings account deposits.
Its overall capital adequacy stood at 17.4 per cent with the core capital at 11.6 per cent as of March 31, 2022. Kumar said the reserves are sufficient to take care of the asset growth in the new fiscal, but it would like to go for a capital raising exercise to increase its buffers to take care of any eventuality in uncertain times.