Yes Bank reported a net profit of Rs 231 crore for the October-December quarter of 2023-24 on Saturday. The city-headquartered private sector lender had reported a post tax net profit of Rs 52 crore for the year-ago period, heavily impacted by money it had to set aside following the transfer of sour loans to an asset reconstruction company.
In the preceding September quarter, the bank's net profit was Rs 225 crore. Its core net interest income grew 2.3 per cent to Rs 1,971 crore in the reporting quarter on the back of 11.8 per cent growth in advances and a 0.10 per cent narrowing in the net interest margin at 2.4 per cent.
The non-interest income grew 12.1 per cent to Rs 1,195 crore. Total net income grew by 5.8 per cent to Rs 3,211 crore in the third quarter of FY24 against Rs 3,036 crore in the year-ago period.
The deposit growth came at 13.2 per cent for the quarter. However, echoing peers who have been flagging risks on the deposits front, the bank's managing director and chief executive Prashant Kumar said the bank will have to be conscious of ensuring that the base keeps growing to ensure that credit growth of around 15 per cent can be sustained.
On the asset quality front, the fresh slippages were Rs 1,200 crore, of which over Rs 1,000 crore came from retail alone. The bank has already recovered Rs 3,800 crore of assets in the first nine months of the fiscal and is confident of surpassing its Rs 5,000 crore target on the same for FY24.
The gross non-performing asset ratio was stable at 2 per cent. Given the regulatory concerns on the unsecured lending and the prevailing market conditions, the bank has reviewed its underwriting practices to be more cautious on the front, a senior official told reporters on the earning call.
Kumar added that the stance will not impact the overall loan growth. The higher risk weights on unsecured lending led to a 0.40 percentage point impact on the capital buffers, and the core buffer stood at 12.6 per cent as of December 31, 2023.
Kumar said there will be an accretion of up to 1.10 per cent in the capital level by June 2024 as a set of warrants get converted.
RBI's move on exposures to non-bank lenders has not led to any change in policies, the bank management said, adding that the exposures also help it achieve priority sector lending targets.
Its overall investments in alternative investment funds stand at Rs 12.5 crore, and have been fully provided for, Kumar said.
The overall provisions came at Rs 555 crore as against Rs 845 crore in the year-ago period but were higher than the quarter-ago's Rs 500 crore.
The bank, which had to undertake a long exercise of scaling down its large corporate book after getting impacted by it earlier, grew the book for the first time in the December quarter, Kumar said, adding that the trend of degrowth in it is over.