PNB Yes Bank and South Indian Bank Record Robust Growth in Q2 Advances While Deposit Growth Slows

PNB Yes Bank and South Indian Bank Record Robust Growth in Q2 Advances While Deposit Growth Slows

Punjab National Bank (PNB), Yes Bank, and South Indian Bank have reported a healthy growth of 12-13% in their advances during the second quarter of the current financial year, as revealed by the provisional quarterly business updates provided by the lenders. Despite this strong growth in lending, the increase in total deposits has been relatively sluggish, with Yes Bank emerging as the exception, recording an 18% rise in deposits, surpassing its growth in advances.

PNB’s total business saw a 12% increase, rising to Rs 25.23 lakh crore from Rs 22.51 lakh crore a year earlier. The bank's domestic loans and advances grew by 11.84% year-on-year to Rs 10.13 lakh crore, while global advances rose by 13% year-on-year and 3.5% quarter-on-quarter to Rs 10.64 lakh crore. PNB’s credit to deposit ratio stood at 72.94% for the quarter, reflecting balanced lending activity. Additionally, the bank reported an 11.4% increase in total deposits, reaching Rs 14.59 lakh crore, up from Rs 13.09 lakh crore in the same period last year, according to its regulatory filing.

In a related development, PNB recently announced a qualified institutional placement (QIP) of its equity shares, allocating around 48.19 crore shares at an issue price of Rs 103.75 per share. This was at a 4.96% discount to the floor price of Rs 109.16 apiece, as noted in a statement from the bank.

Meanwhile, Yes Bank reported a 13% growth in advances, bringing its total advances to Rs 2.36 lakh crore. The private lender also posted an 18% increase in total deposits, which reached Rs 2.77 lakh crore. Despite this impressive deposit growth, the bank saw a slight moderation in the pace of growth compared to the quarter ending in June, where deposits grew 20.9%. On a sequential basis, deposits increased by 4.6% compared to the previous quarter, reflecting a slower growth rate.

However, shares of Yes Bank dropped by 2.4% to Rs 21.88, as the bank's liquidity coverage ratio fell to 131.9%, down from 137.8% in June and 120.9% in the same quarter a year ago. Furthermore, Yes Bank’s credit to deposit (CD) ratio dipped to 85.3% for the September quarter, compared to 89.2% a year earlier.

The Reserve Bank of India (RBI) has been expressing concerns over the widening gap between credit growth and deposit growth within the banking sector. This gap has pushed the industry's CD ratio to 77.16% as of September 6, compared to 76.07% a year earlier.