Home ›› 22 Jan 2023 ›› Asia Biz
India’s Yes Bank (YESB.NS) reported a surprise 80per cent plunge in quarterly profit on Saturday as provisions for bad loans increased.
Net profit fell to 515.20 million rupees ($6.36 million) for the three-months ending December 31, from 2.66 billion rupees in the year-earlier period. Analysts had expected profit to rise to 3.36 billion rupees, according to Refinitiv IBES data, reports Reuters.
The net interest margin, a key indicator of a bank’s profitability, rose 10 basis points in the third quarter to 2.5per cent.
The bank’s asset quality improved as gross non-performing assets declined to 2.02per cent of total loans, from 12.89per cent in the previous quarter. Net non-performing assets declined to 1.03per cent from 3.60per cent.
The bank also aims to recover around 10 billion rupees in the current quarter, Chief Executive Prashant Kumar said in a call on Saturday.
Net interest income, the difference between the interest income from lending and that paid to depositors, rose 11.7per cent to 19.71 billion rupees. Provisions increased to 8.44 billion rupees from 5.82 billion rupees the previous quarter.
Yes Bank in December completed the transfer of bad loans worth 480 billion rupees to private equity firm J.C. Flowers, in a deal aimed at cleaning up its balance sheet.
The lender’s loan growth improved by 10per cent while deposits rose 16 per cent.
Kumar is confident that the bank will be able to achieve 15per cent full-year credit growth while he expects overall deposit growth in a range of 16per cent-17per cent.
As the scramble for deposits increase, the bank believes that it may not be able to achieve its target on low-cost current and savings account deposits (CASA) in this financial year, which it aimed to increase to 35per cent.
