Yes Bank unexpectedly reported an 80% drop in quarterly profit on Saturday as provisions for bad debts increased.
Net profit fell to 515.20 million rupees ($6.36 million) in the three months to December from 2.66 billion rupees in the same period a year earlier. Analysts had expected profits to rise to Rs 3.36 billion, according to Refinitiv IBES data.
But net profit margin, a key indicator of a bank’s profitability, rose 10 basis points to 2.5%.
The bank’s asset quality improved as total bad assets decreased to 2.02% of total outstanding loans from 12.89% in the September quarter. Net bad assets decreased from 3.60% to 1.03 %.
Net interest income, the difference between interest income from lending and paid to depositors, increased 11.7% to Rs 19.71 billion.
Provisions increased to 8.44 billion rupees from 5.82 billion rupees in the previous quarter.
Yes Bank in December completed the transfer of bad debt worth 480 billion rupees to private equity firm JC Flowers, in a deal to clean up its balance sheet.
Lenders’ loan growth improved by 10% while deposits increased by 16%.
This goes against the trend of the domestic banking industry. Bank loans rose nearly 15% in the two weeks to December 30 from a year earlier, outpacing a 9.2% increase in deposits, according to the latest data from the Reserve Bank. India (RBI).
(Except for the title, this story has not been edited by NDTV staff and is published from an aggregated feed.)
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