Yes Bank's net profit drops 45% YoY in January-March on higher provisions

Yes Bank on Saturday reported a near 45% drop in net profit year-on-year for the January-March quarter

Yes Bank on Saturday reported a near 45% drop in net profit year-on-year for the January-March quarter as provisions for bad loans increased.

Net profit fell to RS 202 crores ($24.63 million) for the reporting quarter from Rs 367 crores in the same period a year earlier. Analysts had expected profit to drop to Rs 288 crores, according to Refinitiv data.

"Increased provisions on standard assets merely as a prudent measure; do not see any specific rise in stress," said Prashant Kumar, managing director and chief executive officer of Yes Bank.

However, quarter-on-quarter, the net profit soared by 288 percent, as it had came in at just Rs 52 crores for the three-month period ending on December 31, 2022.

The bank's net interest income increased to Rs 2,105 crore in Q4FY23 from Rs 1,819 crore in the year-ago period, marking a 15.7 percent jump. The NII also witnessed a near 7 percent growth from the previous quarter of 2023.

The non-interest income for the March quarter came in at Rs 1,082 crore, which is nearly 23 percent higher as against Rs 882 crore in the year-ago period. However, the non-interest income for the bank fell 5.3 percent from the third quarter of fiscal year ended 2023.

The total net income, combining NII and non-interest income, stood at Rs 3,188 crore in Q4 FY23, which is 18 percent higher YoY and up 2.4 percent QoQ.

“Over the last three years, the Bank has significantly progressed on several
strategic objectives such as strengthening of Governance and Compliance Standards, bolstering the Balance Sheet through granularity, addressing the asset quality concerns, building up a strong liability franchise and expanding the customer base," said Kumar.

The gross non-performing asset (GNPA) ratio stood at 2.2 percent in March quarter, as against 13.9 percent the year-ago period. The net non-performing  ratio (NNPA) came down to 0.8 percent, as compared to 4.5 percent in Q4 FY22.

"Moreover, the significant recoveries and upgrades during the year and particularly Q4 have been utilized for accelerated provisioning to step-up PCR and normalize credit costs over the near term," Kumar said.

Yes Bank's operating expenses in Q4 FY23 came in at Rs 2,299 crore, which is 19.3 percent up YoY, according to a press release.

The cost to income ratio was at 72.1 percent in Q4 FY23 against 71.3 percent in Q4FY22.

The bank's balance sheet during the quarter under review grew 11.5 percent YoY and 3.2 percent QoQ to Rs 3,54,786 crore. The total deposits stood at Rs 2,17,502 crore, up 10.3 percent YoY and 1.8 percent QoQ.

Net advances during the March quarter stood at Rs 2,03,269 crore, which is up 12.3 percent as against the year-ago period and 4.5 percent higher from last quarter.

The bank recorded new sanctions and disbursements of Rs 1 lakh crore in FY23. This included disbursements of Rs 12,705 crore in March quarter towards the the gross retail assets category, Rs 498 crore for rural section, Rs 7,389 crore for SME and Rs 1,573 crore for mid corporates.