Private sector lender YES Bank, which exited the Reconstruction Scheme with formation of an alternate Board earlier this month, reported a 50 percent year-on year (YoY) rise in its net profit for the quarter ended June at Rs 311 crore. Here are the top five highlights from the bank earnings:
Advances growth stable
YES Bank’s total advances grew to Rs 1.86 lakh crore as on March end, higher 3 percent on a quarter-on-quarter (QoQ) basis and 14 percent on year.
Presently, retail and micro, small and medium enterprises (MSME) loans account for 62 percent of the bank’s total advances. YES Bank aims to increase the share of these loans to a total of 66 percent in overall loan portfolio by the end of current fiscal, as per its Q1 investor presentation.
Further, YES Bank’s gross standard restructured pool of loans reduced to Rs 6,453 crore as on June end, from Rs 6,752 crore a quarter ago.
Overall, new sanction of loans and disbursements by YES Bank stood at Rs 22,636 core during the quarter ended June. The size of its total balance sheet grew 17 percent YoY to Rs 3.18 lakh crore as on June end.
Deposits growth robust
YES Bank total deposits grew to Rs 1.93 lakh crore as on June end, higher 18.3 percent YoY but lower 2 percent sequentially. The lender’s low cost current-account and savings account ratio (CASA) ratio stood at 30.8 percent as June end, lower than 31.1 percent a quarter ago but higher from 27.4 percent a year ago.
Net interest income (NII), or the difference between interest earned and expended, stood at Rs 1,850 crore during April-June, up 32 percent on year and 1.7 percent on a sequential basis. The private bank’s net interest margin (NIM) rose 30 basis points YoY to stand at 2.4 percent during the reporting quarter.
Asset quality holds
The bank’s gross non-performing asset ratio (GNPA), as on June end, improved to 13.4 percent from 13.9 percent as on March end, and 15.6 percent a year ago. Net NPAs (NNPA), meanwhile, moved to 4.2 percent as on June 30, lower than 4.5 percent as on March end.
Slippages, at Rs 1,072 crore in April-June, were lower than Rs 2,233 crore reported last fiscal but higher than Rs 802 crore last quarter.
Total recoveries and upgrades during April-June stood at Rs 1,532 crore. The recoveries are in-line with the bank’s annual guidance that it will achieve Rs 5,000 crore of recoveries in current fiscal. Provision coverage ratio (PCR), as on June end, stood at 82.3 percent including technical write-offs.
NPA auction
YES Bank has signed a binding term sheet with US-headquartered JC Flowers to form an asset reconstruction company (ARC), it said. The ARC will be formed with an objective of acquiring YES Bank’s identified stressed pool of up to Rs 48,000 crore of loans and auctioning it to buyers.
The bank has proposed holding up to 20 percent stake in the ARC. JC Flowers has already provided a base bid of Rs 11,183 crore for the proposed pool of assets and the bank has launched a Swiss Challenge auction for the stressed loans with JC Flowers’ bid as the base bid.
“Pursuant to successful closure, transaction set to be the largest sale of stressed assets deal in domestic markets,” the bank said. Addressing media earlier this month, Kumar said post completion of the bank’s stressed loan transaction, YES Bank will have bad loans in the range of 1 percent to 2 percent.
Management updates
YES Bank has exited the reconstruction scheme and formed an alternate Board after receiving requisite approval from July 15, it said in an exchange notice. The RBI subsequently withdrew its additional directors appointed on the YES Bank Board. Presently, the bank Board consists of 6 Independent Directors, 2 Non-Independent Directors and MD & CEO Prashant Kumar.
The alternate board has recommended Kumar’s candidature for the post of MD and CEO for another 3 years and the proposal is pending Reserve Bank of India (RBI) and shareholders’ approval, the bank said.
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