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MUMBAI : Mumbai: Yes Bank will have no non-performing asset after it transfers its entire bad loan book to the asset reconstruction company (ARC) by the end of March 2022, according to managing director and chief executive officer Prashant Kumar.

The private sector lender will transfer all bad loans in the retail, corporate, and micro, small and medium enterprises (MSME) books to the ARC, Kumar said while announcing the second-quarter earnings.

Yes Bank is talking to investors who have shown interest in the ARC and expects to complete the process in 60 days, Kumar said. Nearly 12 investors have expressed interest in setting up the ARC with Yes Bank as the minority partner. This includes Brookfield Asset Management, Ares SSG, Oaktree Capital Management, JC Flower, Varde Partners, CarVal Investors, Avenue Asia Group, Bain Capital’s India Resurgent Fund, Apollo Global Management, Rohatyn Group, and Silver Point Capital.

Yes Bank reported a 74% year-on-year increase in net profit to 225.50 crore for the September quarter due to lower provisions. The bank had reported net profit of 129.37 crore a year earlier. Net interest income in the quarter ended September fell 23% to 1,512 crore from 1,973 crore a year ago.

The bank’s loan book showed signs of increased stress in the second quarter because of higher restructuring of MSME loans and the second wave of covid-19. The restructured book expanded by 24% to 6,184 crore from 4,976 crore a quarter ago. That said, asset quality improved marginally, with gross non-performing assets (GNPAs) at 28,741 crore at the end of September against 28,506 crore in the last quarter. As a percentage of total assets, GNPAs stood lower at 14.97% at the end of the second quarter compared to 15.6% in the previous quarter.

Fresh slippages fell sequentially to 1,783 crore. Of this, corporate slippages were 750 crore at the end of the September quarter compared to 1,258 crore last quarter. “If we see the movement of NPA, addition of bad loans in the retail and MSME sector were 1,000 crore. We do not expect more than 600 crore of NPA from these segments in the coming quarter," Kumar said.

Provisioning thus fell to 377.37 crore at the end of September quarter versus 457.03 crore a quarter ago. The bank also made prudent provisioning of 336 crore on a single telecom exposure in the quarter.

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