Yes Bank shares tank 9% on reporting 80% fall in Q3 profit

Market


Shares of Yes Bank plunged more than 9% to 17 apiece on the BSE in Monday’s opening deals after the lender reported a 80% fall its in quarterly net profit for the three-month period ended December 2022 as provisions for bad loans increased. The overall provisions of the bank rose to 845 crore during the quarter under review as compared to 375 crore year-on-year (YoY).

Net profit fell to 51.5 crore as compared to 266 crore in the year ago quarter. Analysts had expected the lender’s profit to rise to 336 crore, according to Refinitiv IBES data. Meanwhile, the net interest income (NII), difference between interest earned and expended, rose nearly 12% to 1,971 crore. The net interest margin, a key indicator of a bank’s profitability, rose 10 basis points in the third quarter to 2.5%.

The bank’s asset quality improved as gross non-performing assets (NPAs) declined to 2.02% of total loans, from 12.89% in the previous quarter whereas the net NPAs stood at 1.03% as compared to 3.60% quarter-on-quarter (QoQ). Loan growth improved by 10% while deposits rose 16%.

The private sector lender also announced that it will appeal against the Bombay High Court’s order in the 8,400-crore AT-1 bonds case of 2020, saying it has strong legal grounds to do the same.

Prashant Kumar, MD & CEO of Yes Bank said, “During the quarter, the Bank successfully closed two deals which are strategic and transformational in this new journey of the Bank. The successful Capital Raise has aided in significant expansion in our Capital Base, and post full consummation, our CETI Ratio will reach an extremely comfortable level. Moreover, with successful transfer of stressed Assets to the JC Flowers ARC, the GNPA and NNPA Ratios have now declined to the lowest since Q3FY19.”

Last month, the private sector lender said it has transferred stressed assets of 48,000 crore to JC Flowers Asset Reconstruction Pvt Ltd, a move that will wipe the bank’s book clean of dud assets.

The banking stock has gained more than 35% in a year’s period.


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