Yes Bank reported its Q2FY22 earnings on Friday. The bank reported a profit after tax of Rs 225 crore for the quarter ended September, an increase of 74.3 percent over the year-ago period, mainly on the back of lower provisioning requirements. The bank's profit after tax stood at Rs 129 crore in the corresponding quarter of previous fiscal. The bank's Net Interest Income (NII) declined 23.4 percent to Rs 1,512 crore in Q2 FY22 compared to Rs 1,973 crore in the year-ago period. The net interest margins dipped to 2.2 percent from 3.1 percent in the same quarter of the previous fiscal.

Gross Non-Performing Assets (NPAs) ratio improved to 15 percent in the latest September quarter from 16.90 percent in the year-ago period while net NPAs stood at 5.5 percent compared to 4.7 percent in the same period a year ago. Fresh slippages during the quarter under review stood at Rs 1,783 crore, out of which corporate slippages were to the tune of Rs 750 crore.

In an interview with CNBC-TV18, Prashant Kumar, Managing Director and CEO at Yes Bank, said that he is seeing a huge improvement in asset quality both on the corporate as well as on the retail and MSME side.

Second wave of COVID-19 impacted retail and MSME segment. “However, at the end of Q2FY22, 30-days plus has come down significantly from Rs 2,500 crore to Rs 1,000 crore,” he said.

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When asked about the possibility of Yes Bank’s takeover or merger with another bank, he replied, “As of now, we don’t see any possibility. There is no need for us to get merged with somebody but if the situation improves and if there are any opportunities available for inorganic growth, we will definitely explore.”

Net interest margins (NIMs) are better and have improved by 10 basis points (bps) for this quarter, he noted.

“Loan repricing happens much faster than the deposit repricing. Whatever reduction we have done on the rate of interest, on deposits, and the way our CASA ratio is improving, be year-end we would be exiting around 2.5 percent plus,” Kumar said.

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He doesn’t see any pressure of restructured accounts getting slipped into non-performing assets (NPAs) category, going forward.

“It was mainly COVID-19 restructuring, and the MSME restructuring. The positive part is, wherever the restructuring has been done, the customers are not only able to take care of the repayment liabilities but are also repaying more than what was due to the banks,” he mentioned.

The overall slippages of both corporate and retail for Q3FY22 would come down below Rs 1,000 crore, Kumar specified.

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On credit cost guidance, he said, “Credit cost on account of slippage would be adequately covered by recovery and upgradation. For the overall quarter, it was much better than what we were expecting. Going forward, all credit cost would be taken care of by the recoveries. If we talk about the next two quarters, the credit cost would not be more than Rs 500-600 crore.”

For next year’s loan growth, there would be some requirement of capital which will be explored at the right time, he shared.

For the full interview, watch the accompanying video.

(With inputs from PTI)

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(Edited by : Dipikka Ghosh)

First Published:Oct 25, 2021 1:41 PM IST