Private sector lender Yes Bank reported its financial results for the third quarter of the ongoing fiscal year 2024 today, posting a 2.3% year-on-year rise in net interest income. However, the bank’s net profit for the quarter fell short of market expectations.
In its regulatory filing with the stock exchanges, Yes Bank announced a net profit of Rs. 231.6 crore for the October-December period of FY2024. While this marks a 14.7% rise from the corresponding period of the previous fiscal, it was below analysts’ projected figure of Rs. 415.1 crore.
The bank’s net interest income – the difference between interest earned and expended – grew 2.3% to Rs. 2,016.8 crore in Q3 FY2024, compared to Rs. 1,973 crore in Q3 FY2023. Yes Bank’s net interest margin – a key measure of profitability – stood at 2.8% for the reported quarter.
On the asset quality front, Yes Bank saw its gross non-performing assets (NPAs) remaining unchanged at 2% of gross advances as of December 2023. The net NPA ratio improved marginally to 0.9% from 1% in the year-ago period. Recoveries and upgrades from NPAs exceeded fresh slippages during the quarter.
Yes Bank’s total advances rose 11.2% year-on-year to Rs. 2.52 lakh crore as of December 2023. Total deposits were up 10.9% to Rs. 2.66 lakh crore. The bank’s capital adequacy ratio stood at 16.3% at the end of Q3 FY2024, providing it with sufficient buffers to support future loan growth.
While announcing the results, Yes Bank’s MD & CEO Prashant Kumar said the bank is focused on improving asset quality while maintaining healthy growth momentum. He added that recoveries from resolved stressed assets and sale of NPAs to asset reconstruction companies will help reduce the stock of bad loans further.
On the outlook, analysts feel Yes Bank is on the right path of recovery after the turmoil of 2018-19. Ongoing clean-up of legacy stressed assets and capital raise have strengthened its balance sheet. However, its Q3 profit missed estimates, underlining the need for more improvements on the operational efficiency front. The stock ended marginally higher today after the results.
In summary, Yes Bank has posted steady growth in advances and deposits while maintaining stable asset quality in Q3 FY2024. However, its profitability needs to catch up with rising market expectations for a stronger performance. The bank will need to focus on cost optimization and boosting fee income to achieve higher profit numbers going forward.
