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Private sector lender YES Bank reported a 60.1 per cent drop in its net profit in the first quarter of the fiscal at ₹45.44 crore, compared with ₹113.76 crore a year ago.
Aided by the confidence from the reconstruction scheme, the bank’s deposit base increased 11.4 per cent sequentially to ₹1,17,360 crore in the first quarter of the fiscal. The ₹15,000 crore further on public offer has improved its capital position and the CET1 ratio of the bank as at June 30, 2020 was at 13.3 per cent and total Capital Adequacy Ratio stood at 20.0 per cent.
Prashant Kumar, Managing Director and CEO, YES Bank said there is no point in comparing year on year numbers as the bank went through reconstruction in March. he highlighted that operating costs have been controlled significantly and the lender has also been able to repay 50 per cent of the support from RBI’s special liquidity window.
YES Bank’s total income was down 32.8 per cent to ₹6,106.74 crore in the quarter ended June 30, 2020 from ₹9,088.80 crore a year ago.
Net interest income fell 16.3 per cent to ₹1,908 crore in the first quarter of the fiscal while non-interest income declined by 51.2 per cent to ₹621 crore in the quarter. Net interest margin was up nearly 109 basis points sequentially at 3 per cent as on June 30, 2020.
Its provisions however, declined by 39.1 per cent to ₹1,087 in the first quarter of the fiscal from ₹1,784 crore a year ago. The provisions for the first quarter included ₹642 crore of Covid19 related provisioning.
The bank’s gross NPAs stood at 17.3 per cent of gross advances as on June 30, 2020 while net NPAs was 4.96 per cent.
YES Bank said the growth in deposits was “aided by 26.4 per cent q-o-q growth in current account deposits and 12.6 per cent q-o-q growth in term deposits; CASA ratio at 25.8 per cent in the first quarter this fiscal,”, adding that during the quarter, intensified client outreach resulted in win back of mandates and acceleration in customer acquisition.
Net advances declined by four per cent sequentially to ₹1,64,510 crore as on June 30, 2020.
The bank is compliant with its minimum regulatory LCR requirements with LCR ratio of 114 per cent as at June 30, 2020 (regulatory minimum requirement of 80 per cent).
The bank also noted that while there is systemic risk due to Covid-19 Pandemic which may adversely impact the financial sector, but given the capital raise, its “fast stabilising liquidity position in the first quarter” along with compliance with regulatory ratios, customer base and branch network and first quarter performance, it believes that the earlier highlighted material uncertainties regarding going concern have been substantially addressed. As such the financial results continue to be prepared on a going concern basis, it said.
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