Yes Bank on Friday reported a net profit of Rs 129.37 crore in the September quarter (Q2FY21). The lender had incurred a loss of Rs 600 crore in Q2FY20, due to cost reduction and improved asset quality. Sequentially, the net profit of the lender increased 2.8 times, compared to Rs 45-crore net profit in the June quarter (Q1FY21). Operating expenses in the September quarter declined 21.1% year-on-year (y-o-y) to Rs 1,320 crore. Similarly, cost to income ratio remained at its lowest in five quarters at 49.3%.
The lender’s net interest income (NII) however, declined 9.7% y-o-y to Rs 1,973 crore. The bank has made full repayment of Rs 50,000 crore to the Reserve Bank of India (RBI) on account of special liquidity facility provided by the regulator.
The lender has stepped up provisions due to Covid-19. Prashant Kumar, managing director (MD) and chief executive officer (CEO), said that total Covid-19-related provisioning was stepped up to Rs 1,918 crore, which is 1.15% of the bank’s advances.
The bank has not declared any new non-performing assets (NPAs) due to the interim order of Supreme Court. The apex court had earlier directed banks not to recognise fresh NPAs, till further orders in the interest on interest case. A public interest litigation (PIL) was earlier filed in the Supreme Court to waive off interest on interest for borrowers during the moratorium period between March to August, 2020.
“We have Rs 2,391 crore, which would have slipped to NPA category without the Supreme Court order. We have Rs 4,060 crore which is overdue more than 60 days and we have Rs 2,621 crore which is overdue between 31 to 60 days, “ Kumar said.
The asset quality of the bank showed improvement in Q2FY21. The gross NPAs improved 40 basis points (bps) to 16.9%, compared to 17.3% in the previous quarter.
Similarly, net NPAs came down 25 bps to 4.71% from 4.96% in the June quarter. The provision coverage ratio (PCR) of the bank stood at 75.7% as on September 30, 2020. The net interest margin (NIM) improved to 3.1% in the September quarter, showing a y-o-y growth of 40 bps, and quarter-on-quarter (q-o-q) jump of 10 bps.
Advances rose 1.5% sequentially in Q2FY21 to Rs 1.66 lakh crore. The lender has disbursed Rs 3,500-crore retail loans in Q2FY21, compared to `3,100 crore disbursed in Q2FY20. Similarly, the bank has disbursed Rs 2,800 crore to micro, small and medium enterprises (MSMEs) during the September quarter. “The lender is targeting fresh disbursement of Rs 10,000 crore of retail and MSME loans in the December quarter, “ Kumar said.
Deposits grew 15.7% quarter-on-quarter (q-o-q) to Rs 1.36 lakh crore. The current account savings account (CASA) ratio of the bank came down to 24.8% in Q2FY21, compared to 25.8% in Q1FY21. Capital adequacy ratio of the bank stood at 19.9% at the end of September 30, 2020.
Prashant Kumar said that bank was continuing with cost reduction measures across sectors. “We have converted 35 rural branches into business correspondents (BC), there is rationalisation of automated teller machines (ATMs) and renegotiation of rent agreements with landlord. More such measures will continue,” he said.