Yes Bank reported a significant increase in net profit for the second quarter of the current financial year (Q2FY25), more than doubling to ₹553 crore, driven by steady growth in both net interest income and non-interest income, along with a sharp reduction in provisions and contingencies.
Sequentially, the Mumbai-based lender’s net profit rose by 10.1% from ₹502 crore in Q1FY25. However, its stock closed down 3.05% at ₹19.4 per share on the BSE on Friday.
Prashant Kumar, managing director and CEO of Yes Bank, described the Q2FY25 results as encouraging, especially in light of challenges faced by the industry. He noted sustained improvements in asset quality despite increased distress in the unsecured loan segment.
Yes Bank’s net interest income (NII) grew 14.3% year-on-year (Y-o-Y) to ₹2,200 crore in Q2FY25, up from ₹1,925 crore in the same quarter last year, although it saw a slight decline of 1.9% from ₹2,244 crore in Q1FY25. The net interest margin (NIM) remained stable at 2.4% in Q2FY25, the same as in Q2FY24, with a minor increase of one basis point from 2.3% in Q1FY25.
The bank’s non-interest income, which includes fees for customer services and commissions, rose 16.3% Y-o-Y to ₹1,407 crore. Recoveries and resolutions amounted to ₹1,021 crore in Q2FY25, including ₹258 crore from security receipts.
The asset quality also improved, with gross non-performing assets (NPAs) decreasing to 1.6% in September 2024 from 2.0% in September 2023. Net NPAs fell to 0.5% in September 2024 from 0.9% a year earlier. The provision coverage ratio (PCR), including written-off accounts, improved to 81.5% in September from 72.1% a year ago.
Advances grew by 12.4% Y-o-Y, reaching ₹2.35 trillion in Q2FY25. Retail advances remained flat year-on-year, aligning with the bank’s strategy to enhance profitability, while SME advances rose by 25.8% Y-o-Y and mid-corporate advances increased by 25.5% Y-o-Y.
Kumar stated that the bank aims to grow its overall loan portfolio at a rate of 13-14% and deposits by 17-18% in FY25, while closely monitoring the performance of the unsecured loan segment.
Regarding interest in the microfinance sector, he emphasized its importance and the bank’s intention to explore opportunities in this promising area, suggesting that the timing for potential acquisitions may be favorable.
Total deposits increased by 18.3% Y-o-Y to ₹2.77 trillion, with the proportion of low-cost deposits—current accounts and savings accounts (CASA)—rising to 32.0% in September 2024 from 29.4% a year earlier.
As of September 2024, the bank’s capital adequacy ratio stood at 16.1%, with a common equity Tier-1 ratio of 13.2%.
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