Private sector lender Yes Bank’s standalone net profit shot up by 76.8 per cent in the third quarter of the current fiscal on the back of a sharp drop in provisions despite a fall in the net interest income.

For the quarter ended December 31, 2021, the bank reported a standalone net profit of ₹266.43 crore as compared to ₹150.71 crore in the corresponding period of last fiscal. However, its net interest income fell by 31.1 per cent to ₹1,764 crore in the quarter under review from ₹2,560 crore a year ago.

Net interest margin was also lower at 2.4 per cent as on December 31, 2021, from 3.4 per cent a year ago. It was, however, higher than 2.2 per cent in the second quarter of the fiscal. Non-interest income declined by 32.5 per cent on a year-on-year basis to ₹734 crore during the reporting quarter. Provisions fell by 82.1 per cent to ₹375 crore in the third quarter of the fiscal from ₹2,089 crore in the same period last fiscal.

Asset quality

Asset quality remained under pressure though it saw some improvement. Gross non-performing assets (NPAs) stood at ₹28,654.49 crore or 14.65 per cent of gross assets as on December 31, 2021, compared to 15.36 per cent as on December 31, 2020.

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Net NPAs amounted to ₹9,323.34 crore or 5.29 per cent of the net assets as on December 31, 2021, against 4.04 per cent a year ago.

“Resolution momentum continues with ₹610 crore of cash recoveries and ₹573 crore of upgrades during the third quarter of the year,” Yes Bank said in a statement on Saturday.

Fresh slippages were lower at ₹978 crore. NPA provision coverage ratio stood at 79.3 per cent. Overdue loans in the 31 to 60 days bucket were lower at ₹Rs 5,305 crore in the third quarter of the fiscal as compared to ₹8,167 crore a year ago. “Overdue loans in 31-60 days bucket higher by 1,600 crore, quarter on quarter, predominantly on account of one large infrastructure group fully backed by strong and highly valued collateral,” the bank said. Advances grew 3.8 per cent year on year to ₹1,76,241 crore as on December 31, 2021, and deposits shot up by 26 per cent to ₹1,84,288 crore by the year end. Prashant Kumar, Managing Director and CEO, Yes Bank, said the lender expects 10 per cent growth in loans in the current financial year. “There is significant growth in retail and MSME, mid market corporate segments,” he told reporters.

Asset reconstruction company

Kumar also expressed confidence that the process of setting up the asset reconstruction company would be completed by March 2022 or latest by the end of the first quarter of 2022-23 and bad loans of about ₹50,000 crore would be transferred to it. Four international investors have been shortlisted and the process of due diligence is currently going on, he said, adding that they will seek approval from the Reserve Bank of India (RBI). The bank is expected to hold a 20 per cent stake while the remaining will be held by the international investor.

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