Yes Bank has returned to full-fiscal profitability since 2018-19 but the main issue of moving its bad loans to an asset reconstruction company (ARC), which it wants to partly own, continues to be elusive. 

Yes Bank chief executive Prashant Kumar once again reiterated that the lender’s plan to set up an ARC is on track. But it remains to be seen if this time the deal is conclusive even as the private lender’s gross bad loans stood at Rs 27,976 crore as of 31 March 2022.

 “The process to form the ARC and complete the transfer of legacy stressed assets is on track and we expect to complete this by the end of the current quarter," Kumar said on Saturday.

 Yes Bank, which ran into trouble after concentrating its loans to a few corporates, has been trying to rope in a partner to form an ARC which would hold its stressed pool of assets. Since last year, Kumar has been firm on not selling these assets to another ARC but to float one where it would own a minority stake of 20%.

 In August, Yes Bank had invited expressions of interest to set up an ARC. The lender had initiated talks with American distressed assets investors JC Flowers & Co. and Cerberus Capital.

 Meanwhile, Yes Bank posted a net profit of Rs 1,066 crore for the year ended 31 March 2022, compared to a loss of Rs 22,715 crore in FY20 and a loss of Rs 3,462 crore in FY21.

 The rise in its quarterly standalone profit came due to lower provisions, which fell to Rs 271.04 crore from Rs 5,112.88 crore a year ago.

 For the exit quarter ended 31 March 2022, the private sector bank posted a standalone net profit of Rs 367.46 crore versus a loss of Rs 3,787.75 crore a year ago. In the preceding quarter, the bank reported a net profit of Rs 266.43 crore.

 The bank’s net interest income (NII-interest earned minus interest paid) rose 84.4% over the year-ago period to Rs 1,819 crore compared to Rs 987 crore a year ago. On a sequential basis, the NII rose 3.1%.

 Non-interest income for the fourth quarter grew 27.9% YoY to Rs 882 crore from Rs 689 crore.

 Yes Bank’s asset quality improved with the gross non-performing assets (NPAs) as a percentage of total advances fell to 13.9% from 14.65% a quarter ago. Net NPAs fell to 4.53% from 5.29%. 

The bank aims to see its loans grow 15% in FY23, with the corporate segment expected to increase by 10% YoY and the retail and SME book rising by 25%. As on 31 March, the bank’s total advances grew to Rs 1.81 lakh crore.