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Yes Bank has released its quarterly results for Q1 FY 2021-22. The private sector bank reported net profit at Rs 207 crore, up by 355.2% on a year-on-year basis, the highest in the last 10 quarters. The bank had reported a net loss of Rs 3,788 crore in the quarter ended March 31, 2021 and a net profit of Rs 45 crore in the first quarter of last fiscal.

The strong bottomline came on the back of a 41% year-on-year (y-o-y) fall in provisions and non-interest income that grew by 70% y-o-y to Rs 1,056 crore against Rs 621 crore in Q1 FY2021. NPA ratio also saw sequential decline to 5.78%. 

The Net Interest Income (NII) was recorded at Rs 1,402 crore, up 42.1% q-o-q but down 26.5% on a y-o-y basis. The Net Interest Margin (NIM) during the quarter stood at 2.1%. Total deposits for the bank grew 39% y-o-y – from Rs 1,17,360 crore to Rs 1,63,295 crore within the year.

As of the end of the trading day on 23rd July 2021, shares of the bank closed at Rs 13.1, an increase of 0.8% from the start of the session.

Hits

  • Net profit grew a stellar 355.2% on a y-o-y basis – the highest in the last 10 quarters.
  • 70% increase in the non-interest income on a y-o-y basis – from Rs 621 crore a year ago to Rs 1,056 crores this year.
  • Recoveries and resolutions amounted to Rs 1,643 crore, which overtook slippages of Rs 1,258 crore.
  • Total deposits grew 39% y-o-y – from Rs 1,17,360 crore to Rs 1,63,295 crore within the year.
  • Increase in the CASA ratio by 160 bps on a y-o-y basis to 27.4% compared to 25.8% due to the opening of 1.5 lakh new CASA accounts.
  • Marginal increase in the provision coverage ratio to 79.3% from 78.6% last quarter.

Misses 

  • Net interest income slumped 26.5% y-o-y Rs 1,402 crore, which is below street estimates too.
  • Net interest margin fell from 3% to 2.1% y-o-y.
  • Operating profit declined 19.8% y-o-y from Rs 1,147 crore in Q1 FY2021 to Rs 920 crores in the current quarter
  • Advances saw a marginal reduction from Rs 1,64,510 crore in Q1 FY2021 to Rs 1,63,654 crore in Q1 FY2022.
  • Increase in the gross non-performing loans ratio on a Q-o-Q basis from 15.41% last quarter to 15.6% in this quarter

What Does It Mean For The Investor?

Yes Bank made a recovery and posted the highest net profit of Rs 207 crore in Q1 FY2022. The recovery comes from a loss of Rs 3,788 crore in the last quarter. The bank took measures by reducing its provisions and increasing its non-interest income to bring about this U-turn in revenue. While market analysts expected the bank to post a loss, the bank has surpassed the expectations. This shows that the bank’s management may see some growth in future.

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