Yes Bank issued their Q1 reports on Tuesday, 28th July. The report shows an alarming drop in its YoY net profit. The lender announced a sixty percent YoY drop in its net profit. Which now stands at Rs. 49 Crores in the quarter that ended on June 30th.
The Net Interest Income also plunged by 16.8% from Rs. 2,281 Crores to Rs. 1908 Crores YoY. The Net Interest margin being at 3 percent. The bank also saw a deposit rate increase by 11.4% Quarter on Quarter to Rs. 1,17,360 crore. 26.4% QoQ growth in current account deposits and 12.6% QoQ growth in term deposits are seen. CASA ratio stood at 25.8% in the first quarter.
With the upsurge in the deposit rate, the bank paid back Rs. 25000 crore, approximately fifty percent, to Reserve Bank of India as a part of the resolution package. This, after four quarters of losses, led the bank into profitability. The ratio of non-performing assets also improved to 4.9% from 5% if last quarter. The bank’s gross NPAs stood at 17.3% of gross advances on 30th June. There was also a dip in stock of non-performing assets.
Rs 1,087 crore was set aside as provision of possible defaults. Of this Rs. 642 crore is for COVID-19 related provisions. Higher NII and low operating outlay guided the operating profits to grow 11 times QoQ, to Rs. 1147 crore. Year on Year basis the same has dropped by 41%. Yes Bank shares fell below Follow-on Public offer (FPO) of Rs. 12. The Bank reported a 60% drop of year on year net profit. Yes Bank’s net advances also declined by four percent. The net advances were Rs. 164510 crore in the quarter.
Yes Bank’s Managing Director and CEO Prashant Kumar commented that there is no point in comparing year on year numbers as the bank went through reconstruction in March. He drew special attention to the fact that operating costs have been controlled significantly and the lender has also been able to repay 50 percent of the support from RBI’s special liquidity window.
The bank also divulged that some loan accounts are under investigation by CBI, Enforcement Directorate, and Serious Frauds Investigation Office, on basis of forensic reports submitted by other lenders.The company’s chief executive also said, “I think we are seeing all around that the economic activity has not been able to resume fully but definitely there is some improvement happening.”