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45% profit drop of YES Bank

Net profit declines 45% to Rs 202 cr on higher provisions

Private lender Yes Bank on Saturday reported a 45% drop in standalone net profit to Rs 202 crore for the quarter ended March 31, 2023, as bad loan provisions rose. The bank reported a standalone net profit of Rs 367 crore last year.

On Friday, the Yes Bank scrip on the BSE closed trading nearly 2% lower at Rs 16.22.
Prashant Kumar, MD and CEO, Yes Bank said, “Over the past three years, the bank has made significant progress in meeting several strategic objectives such as strengthening governance and compliance standards, strengthening the balance sheet through granularity, addressing asset quality issues, building a strong liability franchise and expand the customer base.

“At the same time as our continued focus on retail, we have continued to expand our footprint with new locations, increase our headcount and increase our investment in technology. Our retail franchise has now reached critical scale and is ready for profitability.” At the current rate of accelerated growth, increased efficiency and operating leverage will naturally drive the bank’s profitability upwards.”

Yes Bank’s provisions and contingencies increased to Rs 618 crore from Rs 271 crore a year earlier.

The lender’s asset quality was mixed. The gross non-performing asset (NPA) ratio rose to 2.17% from 2.02% in the December quarter.

The gross NPA ratio fell from 13.93% a year earlier. In December, Yes Bank completed the transfer of Rs 48,000 crore worth of bad loans to private equity firm JC Flowers in a deal aimed at cleaning up its balance sheet.

The net NPA ratio was 0.83%, down from 1.03% in the previous three months.

Yes, the bank’s net interest income, the difference between interest income on loans and the return paid to depositors, rose 15.7% to Rs 2,105 crore from Rs 1,819.5 crore in the year-ago period. Net interest margin, a key indicator of the bank’s profitability, rose to 2.8% from 2.5% a year earlier.

Net advances by private lenders rose 12.3% year-on-year, led by retail loans, while deposits rose 10.3%.

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