Private sector lender Yes Bank reported 7% year-on-year decline in its net profit to ₹1,001.8 crore for the October-December quarter, as it had to set aside funds for its exposure to troubled infrastructure conglomerate IL&FS.
Out of total NPA provision of ₹507.5 crore, provisioning for IL&FS alone was ₹478.3 crore. In addition, the bank had made a provision of ₹92.5 crore, which is 15% on the exposure to IL&FS which is still ‘standard’.
Total gross slippages during the quarter was ₹2,297 crore, of which ₹1,913 crore was on account of IL&FS.
“With regard to the infrastructure conglomerate, we have downgraded the position on account of our exposure to roads and the energy vertical which totals to ₹1,913 crore on which the bank has provided 25% in the current quarter,” Rajat Monga, senior group president, financial markets, Yes Bank, said.
About ₹617 crore of exposure to the group continues to be standard, against which the bank has taken a 15% standard asset provisioning in the current quarter,” he added.
“Having done this, the bank believes the aggregate provisioning made on both the operating as well as the subsidiary companies exposure in this particular group are adequate and within the expected realisation,” Mr. Monga said.
As a result of the IL&FS exposure, gross NPA ratio increased to 2.1% as of end December, as compared with 1.6% in end September and 1.72% a year ago. “Outlook on asset quality continues to be stable. We are reiterating that the impact on account of NCLT proceedings on the bank’s asset quality continues to be minimal,” Mr. Monga said.
Net interest income grew 41.2% y-o-y to ₹2,666.4 crore, while net interest margins were stable at 3.3%.
“Non-Interest Income declined 37.4% y-o-y and 39.5% sequentially to ₹890.9 crore predominantly on account of treasury loss and lower corporate fees due to rebalanced sequential growth in corporate advances,” the bank said.
The lender reported a deposit growth of 29.7% year-on-year, while loans grew by 42.2%.