Private lender Yes Bank has reported a net profit of Rs 129.37 crore for the quarter ended 30 September even as asset quality has shown some improvement but continues to be a matter of concern.

In the year-ago period, Yes Bank had posted a loss of Rs 600.08 crore. Net profit in the preceding quarter stood at Rs 45.44 crore.

The bank's gross non-performing assets (NPAs) stood at 16.30% versus 16.8% in March quarter and 5.01% in the same quarter last year.

Net NPAs came at 4.71%, compared with 4.96% a quarter ago and 2.91% for the same quarter a year ago.

Provisions declined 11.10% year-on-year to Rs 1,187 crore. However, on a quarter sequence basis, it saw a 9.3% rise.

Net interest income increased 3.4% quarter-on-quarter to ₹1,973 crore. Net interest margin stood at 3.1% in the fiscal second quarter compared to 2.7% last year. Cost to income ratio declined to 49.30% from 53.40%.

Net advances grew 1.5% quarter-on-quarter to Rs 1,66,923 crore, with strong pickup in retail disbursements at Rs 3,764 crore, the bank said. The deposits increased substantially 15.7% sequentially to Rs 1,35,815 crore, it added.

"Total step up in provisioning of Rs 1,600 crore consisted Rs 1,038 crore towards Covid-19 related provisioning and balance predominantly towards non-performing investments," Yes Bank said in the regulatory filing.

Yes Bank is targeting fresh disbursement of Rs 10,000 crore in retail and MSME, Yes Bank CEO & MD Prashant Kumar said.

"The risk of immediate stress recognition has been deferred due to moratorium and restructuring benefits but we believe it will keep utilising the operating profit to make provisions in the interim," ICICI Securities said in a report.