Yes Bank, a private sector lender headquartered in the city, has reported a significant increase in its net profit for the September quarter. The bank’s net profit rose by over 47% to Rs 228.64 crore compared to Rs 160.41 crore in the same period last year. However, it was lower than the net profit of Rs 347 crore in the previous quarter.
Despite an 11.2% loan growth, Yes Bank’s core net interest income for the reporting quarter was Rs 1,925 crore. However, the bank attributed the fall to a 0.30 percentage point compression in the net interest margins (NIM), which decreased to 2.3%. The NIMs were impacted by a 0.20 percentage point from repricing of past deposits and another 0.35-0.40 percentage point drag from shortfalls in priority sector lending targets.
Managing Director and Chief Executive Prashant Kumar stated that the bank is approaching the end of the slip on the NIMs front and aims to expand the number. The impact of deposit repricing will not be observed again, and the bank is exploring options such as purchasing Priority Sector Lending (PSL) certificates from the market for meeting sub-targets on lending to the small and marginal farming segment.
Yes Bank is also considering the acquisition of a microlender, although no specific details have been disclosed yet. Kumar shared that the bank has set a target of 15% loan book growth and an 18% expansion in deposits for FY24.
Regarding the Reserve Bank of India’s concerns about unsecured loans like credit cards and personal loans, the bank has witnessed increased delinquencies in this portfolio category. The gross NPAs from unsecured loans stood at 2.1%, higher than the retail NPAs of 1.4% and the overall 2% for the bank. As a result, the bank will adopt a cautious approach to its retail assets growth strategy and aim for an optimum level of 48% contribution of retail in the overall assets mix.
In the September quarter, two-thirds of the fresh slippages of Rs 1,200 crore were from retail loans, while corporate loans performed well. The overall provisions for the bank amounted to Rs 505 crore, and there are no changes in the guidance on the overall credit costs.
Yes Bank plans to open 150 new branches in FY24, with 20 branches already established. As of September 30, 2023, the bank’s capital adequacy ratio stood at 17.1%, and there are currently no plans for a fund raise.
Overall, Yes Bank is showing positive financial performance and taking measures to address challenges in the unsecured loan portfolio while focusing on growth and expansion.
I have over 10 years of experience in the cryptocurrency industry and I have been on the list of the top authors on LinkedIn for the past 5 years. I have a wealth of knowledge to share with my readers, and my goal is to help them navigate the ever-changing world of cryptocurrencies.
