MUMBAI (Reuters) – India’s Yes Bank reported a surprise 80% plunge in quarterly profit on Saturday as provisions for bad loans increased.
Net profit fell to 515.20 million rupees ($6.36 million) for the three months through December from 2.66 billion rupees in the same period a year earlier. Analysts had expected profit to rise to 3.36 billion rupees, according to Refinitiv IBES data.
But net interest margin, a key indicator of a bank’s profitability, rose 10 basis points to 2.5%.
The bank’s asset quality improved as gross non-performing assets declined to 2.02% of total loans from 12.89% in the September quarter. Net non-performing assets declined to 1.03% from 3.60%.
Net interest income, the difference between the interest income from lending and that paid to depositors rose 11.7% to 19.71 billion rupees.
Provisions increased to 8.44 billion rupees from 5.82 billion rupees the previous quarter.
Yes Bank in December completed the transfer of bad loans worth 480 billion rupees to private equity firm J.C. Flowers, in a deal aimed at cleaning up its balance sheet.
The lender’s loan growth improved by 10% while deposits rose 16%.
This is contrary to the trend in India’s banking industry. Bank loans rose nearly 15% in the fortnight to Dec. 30 from a year earlier, outpacing a 9.2% increase in deposits, according to the latest data from the Reserve Bank of India.
($1 = 80.9790 Indian rupees)
(Reporting by Nupur Anand and Siddhi Nayak; Editing by William Mallard)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.