Yes Bank’s loan growth has improved by 10%. (file)
Mumbai, Maharashtra:
Yes Bank on Saturday reported a stunning 80% drop in quarterly profit as provisions for bad loans soared.
Net profit fell to 515.20 million rupees ($6.36 million) for the three months through December from 2.66 billion rupees in the same period a year earlier. Analysts had expected profit to rise to Rs 3.36 billion, according to Refinitiv IBES data.
But net interest margin, a key indicator of the bank’s profitability, rose 10 basis points to 2.5%.
The bank’s asset quality improved as gross non-performing assets declined by 2.02% to 12.89% of total loans in the September quarter. Net non-performing assets declined from 3.60% to 1.03%.
Net interest income, the difference between interest income from lending and payments to depositors, rose 11.7% to Rs 19.71 billion.
Provisions increased to Rs 8.44 billion from Rs 5.82 billion in the previous quarter.
Yes Bank completed the transfer of bad loans worth 480 billion rupees to private equity firm JC Flowers in December with an aim to clean up its balance sheet.
The lender’s loan growth improved by 10% while deposits grew by 16%.
This is contrary to the trend of the banking industry in the country. According to the latest data from the Reserve Bank of India (RBI), bank credit grew by nearly 15% in the fortnight to December 30 from a year ago, with deposits rising by 9.2%.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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