Yes Bank, one of India’s leading private lenders, announced a significant rise in its net profit for the July-September quarter, attributing the rise to strong core lending revenues and a decline in bad loan provisions.
For the second financial quarter, Yes Bank’s standalone net profit more than doubled to Rs 553 crore, compared to Rs 225 crore during the same period last year. This performance exceeded analyst expectations, with the average forecast set at Rs 546 crore, according to LSEG data.
The bank’s loan portfolio grew 12.4 percent year-on-year, while deposits saw an impressive 18.3 percent increase. Net interest income, the income generated from loans after deducting interest paid to depositors, rose 14.3 percent to Rs 2.2 billion.
The Indian banking sector has seen strong demand for loans, driven by strong economic growth and increased urban consumption. However, banks face challenges in raising deposits to support this credit growth, which has put pressure on profit margins.
Yes Bank’s net interest margin, a critical measure of profitability, improved to 2.4 per cent, up from 2.30 per cent a year ago, remaining stable compared to the previous quarter.
Additionally, the bank reported a nearly 41 per cent reduction in provisions and contingencies (funds set aside for potential bad loans) totaling Rs 297 crore. This decline was partly due to the reversal of provisions worth Rs 103 crore that were earlier allocated for exposure to alternative investment funds.
Yes Bank’s asset quality also showed improvement, with the gross non-performing assets (NPA) ratio declining to 1.6 per cent as on September 30, from 1.70 per cent at the end of the previous quarter.
Shares of Yes Bank closed down 2.6 per cent on Friday ahead of the results announcement.
(With contributions from Reuters.)
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.