Mid-sized private lender Yes Bank today reported a 30 per cent growth in the March quarter net at Rs 914.1 crore even as exposure to a cement sector account led to a doubling of dud loans and jump in provisions.
The bank's net profit for 2016-17 came in at Rs 3,330.1 crore, up 31.1 per cent over the year-ago period.
The core net interest income grew 32.1 per cent to Rs 1,639.7 crore during the reporting quarter, while non-interest income grew 56.6 per cent to Rs 1,257.4 crore.
However, like its smaller rival Indusind Bank, exposure to a cement account affected Yes Bank as well, with the gross non performing assets ballooning to Rs 2,018.56 crore from Rs 748.98 crore and the ratio almost doubling to 1.52 per cent.
Managing Director and Chief Executive Rana Kapoor called it an "aberration" when it comes to the asset quality story, exuding confidence that it will return back to normal.
He said the growth in GNPA is due to one single borrower which is Rs 911.5 crore or 0.69 per cent of total advances.
"This is a cement company from the North and to the best of our knowledge there is a binding agreement to buy out a certain cement assets by a leading corporate house based in Mumbai. But to be conservative and to meet this new circular we are complying with it but I am quite certain that there will be significant recovery very very soon," Kapoor said.
This led to a jump in overall provisions to Rs 309.7 crore from Rs 186.6 crore in the year-ago period and Rs 115.38 crore in the preceding December quarter, and a fall in the provision coverage ratio to under 50 per cent.
However, Kapoor said excluding the impact of the cement company exposure, the bank has improved on all the matrices and a bulk of exposure is to better-rated corporates.
The credit costs for FY17 came at 0.53 per cent, and the lender is targeting to keep it between 0.50-0.70 per cent in FY18, he said.
The standard restructured advances stood at Rs 481.6 crore or 0.36 per cent, security receipts at 977 crore or 0.73 per cent as of March 31.
Corporate advances accounted for 67 per cent of the loan pie, and Kapoor said the bank is targeting to grow the share of retail to up to 45 per cent till FY20.
The share of the low-cost current and savings account deposits grew to a lifetime high of 36.3 per cent, resulting in a marginal expansion in the net interest margin to 3.6 per cent for the reporting period, he said.
The overall asset quality growth came at 34.7 per cent in FY17 and the bank is targeting a 30 per cent loan growth in 2017-18. The total capital adequacy stood at 17 per cent with the core capital at 13.3 per cent.
The bank plans to add 250 branches to its 1,000 branch network in FY18, and also add up to 5,000 employees to take the total staff strength to over 25,000, Kapoor said.
The private lender also announced a dividend of Rs 12 per share today.
The Yes Bank scrip closed flat at Rs 1,605.40 on the BSE, whose benchmark index gained marginally.