YES Bank Q2 Results update

YES Bank Q2 Results update

Last updated: 26 Oct, 2020 | 10:59 am

YES Bank Q2 Results update

Private sector lender YES Bank’s Q2 results show improvement in asset quality and decline in provisions. The performance continues to be in line with strategic objectives set by the bank under the ‘new journey’ , resulting in sustained improvement across parameters.

Profit: Net profit stood at ₹ 129 crore, 2.8 times increase from 45 crore from last quarter. YES Bank had reported a loss of ₹ 600 crore in the same quarter last year.

Net Interest Income(NII) : NII, which tells the difference between interest earned on loans and expended on deposits, grew 3.4% to ₹ 1,973.4 from the previous quarter. The same was down 9.7% from the same period last year.  NII this quarter was aided by Higher Net Interest Margin (NIM), that grew 10bps (0.1%), quarter-on-quarter.

Non Interest Income: Income derived from fees, i.e. transactions, deposits and granular fee streams, increased 13.9% to ₹ 707 crore from the previous quarter.

Operating Profit: The bank witnessed a sustained momentum in Operating profits, which grew 18.6% quarter-on-quarter to ₹ 1,360 crore. 

Operating Expenses: Operating expenses declined 4.5% quarter-on-quarter ₹ 1,320 Crore.

Provisions and NPA: Provisions declined by 11.2% year-on-year, but increased by 9.2% from the last quarter, to ₹ 1,187 crore. Provisions include ₹ 548 crore predominantly for non-performing investment exposure in a diversified conglomerate.

In absolute terms, the bank's Gross NPA stood at ₹ 32,344.36 crore and Net NPA was at ₹ 7,868.13 crore as on September 30, 2020.

Deposit mobilization continues: Deposits grew 15.7% quarter-on-quarter to ₹ 1,35,815 Crores, a 28.9% increase over 6 month period.

Equity: For the quarter ending September 2020, the bank raised ₹ 15,000 crore of equity capital through Further Public Offering (FPO). 

Investor Base: With SBI Holding 30% stake after the FPO, followed by Bay tree, ICICI Bank and HDFC Bank, YES bank has a strong asset base. 

Important Ratios:

  1. The Credit-Deposit (CD) ratio: is the ratio of how much a bank lends out of the deposits that it mobilises, grew to 123%.
  2. C/I Ratio: The cost to income ratio looks at the cost of running operations as to a bank’s operating income. Lower ratios mean that a bank is running more profitably whereas a higher C/I ratio indicate the banks operating expenses are too high. The bank stated a ratio of 0.493, its lowest in 5 quarters, showing a reduction in operating costs on a sequential basis.
  3. Provision coverage ratio: The provision coverage ratio, measures the ability of banks to service its debt and meet its financial obligations such as interest payments or dividends, stood at 0.757 for quarter ending September 2020.
  4. Liquidity Coverage Ratio as on September 30, 2020 was at 1.073
  5. Capital to Risk (Weighted) Assets Ratio (CRAR) , also known as Capital adequacy Ratio, the ratio of a bank's capital to its risk, stood at 0.199

YES bank ended Monday’s trade at ₹ 13.15. The bank expects to disburse ₹ 10,000 crore of loans to MSMEs and retail segment in the coming quarter. The bank as per the filing, has a distribution channel in place to aggressively ramp up low cost retails deposits, that will eventually favour the NII going forward. With credit rating and outlook upgrades from ICRA, Moody’s, CRISIL, the banks growth is complimented , along with robust numbers quarter-on-quarter.