Yes Bank Q1 net profit surges 46.7% on lower provisions

Mumbai: Private sector lender Yes Bank on Saturday reported a 46.7 per cent growth in net profit to Rs 502 crore for the June 2024 quarter, helped by a reduction in provisions.

The city-headquartered bank's core net interest income rose 12.2 per cent to Rs 2,000 crore. Its net interest margin stayed flat at 2.4 per cent.

The deposits, on which a good part of the system is struggling, were up by over 20 per cent.

The other income line grew 5.1 per cent to Rs 1,141 crore during the quarter.

Its overall provisions declined 41.2 per cent to Rs 212 crore, and a senior official credited the same to the recoveries on bad assets, which were transferred to JC Flowers Asset Reconstruction Company.

There was a writeback of Rs 318 crore on provisions on investments against an outgo of Rs 144 crore in the year-ago period, while provisions for taxation increased to Rs 171 crore from Rs 116 crore, and the same on non-performing assets jumped to Rs 513 crore from Rs 314 crore as the provision coverage ratio increased.

On the asset quality front, the bank acknowledged some stress in the problematic unsecured advances portfolio and added that it has led to a cautious approach in the segment.

The stress is visible in the heightened levels of the advances overdue for between 61-90 days, and the bank exuded confidence in improvements on it in the next two quarters.

Its overall gross non-performing asset ratio was flat at 1.7 per cent and the gross slippages went down to Rs 1,205 crore in the quarter.

Yes Bank MD and CEO Prashant Kumar said it is targeting loan growth of 16-17 per cent for FY25, and a large part of it will come from the mid-market and small business segment.

The large corporate balances are aimed to grow at 10 per cent, Kumar said.

On priority sector loans, where it had reported a shortfall leading to an impact on profit in the March quarters, the bank said it has achieved the target for the June quarter.

It added that a fourth of the Rs 44,000 crore of rural infrastructure development fund balances will exit in FY25, and the remaining over the next 2-3 years.

The RIDF balance share in the loan book will halve to below 5 per cent in the next three years.

The bank plans to open up to 50 branches in FY25 and has launched 140 branches in the last 18 months.

Its overall capital adequacy stood at 16.5 per cent, with the core buffers at 13.6 per cent.

Kumar declined to comment on media reports on a stake sale by its largest owner SBI or if it has received the RBI nod for the stake sale.