New Delhi: Yes Bank, a private sector lender, announced a remarkable 147% increase in its consolidated net profit, reaching ₹566.59 crore for the September 2024 quarter, primarily driven by reduced provisioning. In comparison, the bank reported a net profit of ₹228.64 crore during the same period last year and ₹516 crore in the previous June quarter.
The bank's core net interest income rose by 14.3% to ₹2,200 crore, supported by a 12.4% growth in overall advances and a slight increase in net interest margin to 2.4%. Non-interest income also saw a healthy growth of 16.3%, reaching ₹1,407 crore. Overall deposits grew by 18%, contrasting with a broader industry trend of slower growth.
Chief Executive and Managing Director Prashant Kumar indicated that the bank is targeting a 17-18% growth in deposits and a 13-14% increase in advances for FY25. He mentioned that while there is a 0.70% drag on net interest margins due to balances in the Rural Infrastructure Development Fund (RIDF), the outlook remains positive, as the bank has not faced shortfalls in priority sector lending in the first half of FY25.
From a loan growth perspective, corporate loans grew by over 21%, driven by demand from the mid-corporate segment, although retail loans remained stagnant. A bank official noted that this stagnation is due to market-wide stress and a strategic focus on more profitable loan growth opportunities.
The gross non-performing assets (NPAs) ratio improved to 1.6%, down from 2% a year ago, while overall provisions (excluding tax) decreased by 40% to ₹297 crore, contributing positively to profits. The bank reported fresh slippages of ₹1,314 crore during the quarter, with a significant portion stemming from retail assets, particularly unsecured loans.
Despite industry challenges in the microfinance sector, Yes Bank is actively pursuing acquisitions in this space, with Kumar asserting that it remains a viable business even amid cyclical stress. He expressed interest in acquiring a reputable microfinance lender.
During the quarter, Yes Bank expanded its workforce by over 1,000, bringing its total employee count to over 29,000, to enhance collection efficiency and deposit growth. The bank opened 18 new branches in the first half of FY25 and plans to match this number in the second half, with even more branches anticipated in FY26.
Kumar also highlighted challenges faced by the banking industry in co-lending due to issues with IT integration and credit underwriting. He refrained from commenting on reports regarding a Japanese lender's interest in acquiring a stake in Yes Bank. The bank's overall capital adequacy stood at 16.1%, with a core buffer of 13.2%.
