IDBI Bank Q2 profit falls 39% to ₹2,205 crore on high base of NSDL gains

Yes Bank announced a 65% surge in its Q2 profit to Rs 1,080 crore ($114 million), but cautioned the figure does not account for the Supreme Court's ruling that voided Rs 8,400 crore ($884 million) in additional tier-1 (AT1) bonds. If the ruling's impact were included, the bank would have reported a loss of Rs 5,217 crore.

The apex court's Thursday ruling confirmed a 2023 Bombay High Court decision setting aside the write-off, rejecting appeals by Yes Bank, the Reserve Bank of India, and the central government. The bank is currently evaluating the implications of the ruling and all possible legal remedies, including further Supreme Court proceedings.

The lender, which underwent a restructuring in 2020, recently disclosed that its net worth could fall to Rs 46,970 crore from Rs 53,268 crore if the ruling's impact were reflected in its financials. This would also increase its borrowings to Rs 86,149 crore from Rs 77,734 crore. However, Yes Bank reported that its total capital adequacy ratio would stay at 14.5%.

Analysts had estimated a profit of Rs 955 crore, but the bank's actual profit exceeded expectations. Net interest income grew by 22.7% year-on-year to Rs 2,822 crore, while loan advances increased by 23.7%. Deposits rose by 19.5%, and provisions for non-performing loans fell by 24.2% to Rs 317 crore. Other income rose by 14.4% to Rs 1,882 crore.

The bank's gross non-performing asset (NPA) ratio improved to 1.2% at the end of September from 1.3% at the end of June, indicating better asset quality.