Yes Bank Q2 profit jumps 65%; AT-1 bond ruling impact yet to be assessed, asset quality stable

Mumbai-based private lender Yes Bank Ltd. reported September quarter results on Saturday, October 17, which were higher on a year-on-year basis on the profitability and core income front.Yes Bank's Net Interest Income or core income that it earned, grew by 22.7% during the quarter to ₹2,822.5 crore, compared to ₹2,301 crore it reported during the same quarter last year.Net profit for the period stood at ₹1,080 crore. That's a 65% growth compared to the year-ago period.Net interest margin stood at 2.6%, compared with 2.5% in the September quarter last year, but was lower than 2.7% in the June quarter. The bank’s cost of funds stood at 5.7%, while its cost of deposits was 5.5%.Vinay M Tonse, MD and CEO of Yes Bank, said the lender had delivered another quarter of steady performance, backed by growth in core operating income and an improvement in asset quality.The Bank remains firmly focused on sustaining the strength and growth of its franchise, while continuing to provide our customers with consistent service and support across their banking requirementsTONSE SAIDAsset quality for the private lender remained stable with Gross NPA at 1.2% from 1.3% in June, while Net NPA remaining unchanged at 0.2% from 0.2% in the previous quarter.

In absolute terms, Yes Bank's Gross NPA stood at ₹3,875 crore, while its Net NPA stood at ₹757 crore. This is in comparison to the ₹3,704 crore and ₹677 crore it reported respectively during the previous quarter.Provisions for the quarter declined to ₹317.4 crore from ₹395 crore in June, while other income increased to ₹1,881.5 crore from ₹1,644.3 crore last year. Both contributed to the growth in the bank's profitability.Gross slippages stood at ₹1,035 crore, or 1.3% of advances, compared with ₹1,248 crore, or 2%, in the year-ago quarter and ₹964 crore, or 1.4%, in the June quarter.

Recoveries and upgrades amounted to ₹954 crore, including a profit-and-loss gain of ₹395 crore from security receipts.Based on its business update reported earlier this month, Yes Bank's loans and advances had grown by 23.8% on a year-on-year basis to ₹3.09 lakh crore, while deposits saw growth of 19.5% to ₹3.54 lakh crore from ₹2.96 lakh crore earlier.CASA Ratio stood at 33.7% from 30% in the year-ago period. Normalized for the FCNR inflows, Yes Bank's loan growth stood at 17.7% and deposit growth stood at 13.2% from last year.Yes Bank has been in the news through Thursday and Friday after the Supreme Court decided to set aside the write-off of its Additional Tier-1 bonds worth over ₹8,400 crore.The bank said it had not recognised any impact from the Supreme Court’s ruling on its Additional Tier 1 bonds worth ₹8,415 crore in its Q2 FY27 results, as it is still assessing the implications.The Supreme Court, in its October 15 judgment, upheld the Bombay High Court ruling relating to the write-down of the bank’s AT-1 bonds and dismissed the appeals filed in the matter. Yes Bank said it was examining the judgment and would determine its implications before deciding on the next steps.The ruling had triggered a sharp sell-off in the bank’s shares, with the stock falling 14.5% on Thursday and another 3.4% on Friday to close at ₹17.50.Sources had told CNBC-TV18 exclusively that the lender could recognize the potential ₹5,300 crore to ₹5,400 crore earnings hit during the ongoing quarter itself, or push it to the December quarter, but not later than that.