Yes Bank Q2 Results: Low provisions, high other income aid profits; 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 and also means that the bank has not taken into account any potential losses arising from the AT-1 bond issue, which led to the stock declining nearly 20% across Thursday and Friday.Asset 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.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.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.The write-off had taken place during the RBI-led reconstruction of Yes Bank, when the lender was facing a severe financial crisis.

The rescue involved capital support from State Bank of India and other lenders, while the AT-1 bonds were written down to zero.Shares of Yes Bank had ended at the day's low on Friday as well, declining 3.4% to end at ₹17.5. This follows a 14.5% drop on Thursday after the Supreme Court judgment.