Yes Bank June quarter net jumps 360% on lower provisions, higher other income

2 months ago 16
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Provisioning declined 41% year on year (YoY) and 88% sequentially to Rs 644 crore. The net interest income (NII) fell 26% YoY to Rs 1,908 crore, but rose 42% sequentially.

Yes Bank on Friday reported a 360% year-on-year jump in its net profit to Rs 207 crore for the June quarter, on the back of lower provisions and higher other income. This is the the lender’s highest profit since December 2018.

Provisioning declined 41% year on year (YoY) and 88% sequentially to Rs 644 crore. The net interest income (NII) fell 26% YoY to Rs 1,908 crore, but rose 42% sequentially.

However, other income increased 70% YoY and 29% quarter on quarter to Rs 1,056 crore. The other income included retail banking fees of Rs 342 crore and recovery from written-off accounts worth Rs 249 crore.

On the second wave of Covid-19, the lender said extent to which the pandemic would continue to impact the bank’s results would depend on ongoing as well as future developments, which are highly uncertain. Highlighting the impact of Covid-19, Prashant Kumar, managing director and chief executive officer, said, “The new business generation continued for the quarter with retail disbursements of Rs 5,006 crore, SME disbursements of Rs 3,242 crore and wholesale banking disbursements of Rs 3,625 crore.”

The bank’s net interest margin (NIM) declined 90 basis points (bps) YoY to 2,1%, compared to 3% in the same quarter last year. However, NIMs improved 50 bps sequentially.

The asset quality remained a mixed bag during the June quarter. Gross non-performing assets (NPAs) ratio increased 19 basis points (bps) to 15.6%, compared to gross NPAs of 15.41% in the previous quarter. However, net NPAs ratio improved 10 bps to 5.78% from 5.88% in the March quarter.

“The corporate recoveries and resolutions during the quarter at Rs 1,643 crore outpaced the slippages of Rs 1,258 crore,” Kumar said. The bank aims to make cash recoveries of Rs 5,000 crore during the financial year (FY22).

Total advances remained flat YoY to Rs 1.63 lakh crore. The lender mentioned that retail advances have crossed Rs 50,000-crore mark during the quarter. Total deposits grew 39% YoY to Rs 1.64 lakh crore. Current account/savings account (CASA) deposits grew 48% YoY to Rs 44,790 crore.

CASA ratio improved to 27.4%, compared to 25.8% in Q1FY21. The lender aims to reach CASA ratio of 30% by the end of FY22. The bank’s capital adequacy ratio (CAR) as per Basel III guidelines was at 17.9% as on June 30, 2021.

On the impact of RBI’s direction on Mastercard, the lender said it is tying up with Rupay and Visa for issuing new cards. “We have already signed up with Rupay and tie-up with Visa will be done in a week or so,” Kumar said. The banking regulator had barred Mastercard from adding new customers after it found that the company was non-compliant of RBI’s storage norms.

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