 |
|
Yes Bank, a mid-sized private sector lender in India, has reported a strong set of financial results for the quarter ending September 2024 (Q2 FY25). The bank, which was rescued by the Reserve Bank of India (RBI) in 2020, has shown significant improvement in its performance across key metrics. Its net income, a measure of profitability, soared by over 150% to Rs 553 crore, compared to Rs 225 crore in the same quarter last year. This impressive growth is attributed to a combination of factors, including healthy margins, robust core lending operations, and a stable asset quality.
The bank's net interest income (NII), which is the difference between interest earned on loans and interest paid on deposits, rose by 14.3% to Rs 2,200 crore, reflecting steady growth in its core lending operations. This increase is a positive sign, indicating that the bank is successfully expanding its loan portfolio while managing interest expenses effectively. Additionally, the net interest margin (NIM), which measures profitability on lending activities, has improved to 2.4% from 2.3% a year ago, suggesting improved efficiency in lending operations. However, the NIM remained flat sequentially, indicating a need for further improvement.
Beyond core lending operations, Yes Bank also registered strong growth in its non-interest income, which reached Rs 1,407 crore, equivalent to 1.4% of average assets annualized. This segment comprises income from fees, commissions, and other non-interest-bearing activities. The bank's asset quality also showed improvement, with the gross non-performing asset (NPA) ratio decreasing to 1.6 from 1.7 year-on-year. This decline indicates a reduction in bad loans, highlighting the bank's efforts to recover and manage its loan portfolio more effectively. The net NPA ratio, which reflects the percentage of bad loans after accounting for provisions, remained stable at 0.5. This stability shows that the bank has made progress in containing bad loan formation while maintaining adequate provisions to cover potential losses.
The bank's management has expressed optimism about its future prospects, highlighting the strategic focus on growth in the small and medium enterprise (SME) and mid-corporate segments, along with a resumption of growth in the corporate segment and a calibrated approach to growth in the retail segment. The bank's commitment to profitability improvement and maintaining a nil priority sector lending shortfall indicates a well-defined strategy to sustain its momentum. Overall, Yes Bank's Q2 FY25 performance underscores a significant turnaround in the bank's financial position, showcasing its ability to navigate the challenges of the past and deliver strong financial performance.
Source: Yes Bank net income zooms by over 150 percent to Rs 553 crore in Q2 of FY25