YES Bank reports surprise 80% plunge in Q3 profit to Rs 51 cr as NPAs rise

Net profit fell to Rs 51.52 crore for the three months through December from Rs 266 crore

Yes Bank reported a surprise 80 per cent plunge in quarterly profit on Saturday as provisions for bad loans increased.

Net profit fell to Rs 51.52 crore ($6.36 million) for the three months through December from Rs 266 crore in the same period a year earlier. Analysts had expected profit to rise to Rs 336 crore, according to Refinitiv IBES data.

But net interest margin, a key indicator of a bank's profitability, rose 10 basis points to 2.5 per cent.

The bank's asset quality improved as gross non-performing assets declined to 2.02 per cent of total loans from 12.89 per cent in the September quarter. Net non-performing assets declined to 1.03 per cent from 3.60 per cent.

Net interest income, the difference between the interest income from lending and that paid to depositors rose 11.7 per cent to Rs 1,971 crore.

Provisions increased to Rs 844 crore from Rs 582 crore the previous quarter.

Yes Bank in December completed the transfer of bad loans worth Rs 48,000 crore 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 per cent while deposits rose 16 per cent.

This is contrary to the trend in India's banking industry. Bank loans rose nearly 15 per cent in the fortnight to Dec. 30 from a year earlier, outpacing a 9.2 per cent increase in deposits, according to the latest data from the Reserve Bank of India.