 "Yes Bank Q2FY25 results: Net profit more than doubles to Rs 533 cr")
Private sector lender Yes Bank’s net profit more than doubled in the second quarter of the current financial year (Q2FY25) to Rs 553 crore, supported by steady growth in net interest income, non-interest income, and a sharp decline in provisions and contingencies.
Sequentially, the Mumbai-based lender’s net profit rose by 10.1 per cent from Rs 502 crore in Q1FY25. Its stock closed 3.05 per cent down at Rs 19.4 per share on the BSE on Friday.
Prashant Kumar, managing director and chief executive of Yes Bank, said the performance in Q2FY25 has been encouraging, especially in the context of industry headwinds. Despite heightened distress levels in the unsecured segment, there has been sustained improvement in the asset quality parameter, Kumar said in a post-result media interaction on a virtual platform.
Yes Bank’s net interest income (NII) expanded 14.3 per cent year-on-year (Y-o-Y) to Rs 2,200 crore in Q2FY25, compared to Rs 1,925 crore in the same quarter a year ago. Sequentially, NII declined by 1.9 per cent from Rs 2,244 crore in Q1FY24. Net interest margin (NIM) was flat at 2.4 per cent in Q2FY25, the same level as in Q2FY24. Sequentially, NIM rose by one basis point from 2.3 per cent in Q1FY25.
The bank’s non-interest income, including fees from customer services and commission income, rose 16.3 per cent Y-o-Y to Rs 1,407 crore. Recoveries and resolutions stood at Rs 1,021 crore in Q2FY25, which included recoveries from security receipts of Rs 258 crore in Q2FY25, the bank said in a statement.
The asset quality profile improved, with gross non-performing assets (NPAs) declining to 1.6 per cent in September 2024 from 2.0 per cent in September 2023. Net NPAs also declined to 0.5 per cent in September 2024 from 0.9 per cent in September 2023. The provision coverage ratio (PCR), including written-off accounts, improved to 81.5 per cent in September from 72.1 per cent a year ago.
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Advances grew by 12.4 per cent Y-o-Y to Rs 2.35 trillion in Q2FY25. Retail advances were flat Y-o-Y, in line with the strategy to improve profitability. SME advances were up 25.8 per cent Y-o-Y, and mid-corporate advances rose 25.5 per cent Y-o-Y, according to the analyst presentation.
Kumar said the bank aims to grow its overall loan book at a 13-14 per cent rate and deposits by 17-18 per cent in FY25. It will monitor the unsecured loans segment closely to assess its performance.
Referring to the bank’s interest in the microfinance business, he said, “It is important for us, and we will continue to explore opportunities.” This is a promising segment that will continue to exist, Kumar added, noting the timing of acquisition may be right.
Total deposits increased 18.3 per cent Y-o-Y to Rs 2.77 trillion. The share of low-cost deposits—current account and savings account (Casa)—rose to 32.0 per cent in September 2024 from 29.4 per cent a year ago.
The bank’s capital adequacy stood at 16.1 per cent, with common equity Tier-1 at 13.2 per cent as of September 2024.