YES Bank net profit up 33%; asset quality stable

To Rs 731.8 crore in the April-June quarter as its net interest income and other income surged significantly

Private sector lender YES Bank has reported a 32.8 per cent growth in net profit at Rs 731.8 crore in the April-June quarter as its net interest income and other income surged significantly.

Net interest income, the difference between interest earned and interest expended, increased 24 per cent to Rs 1,316.6 crore as the lender recorded a nearly 33 per cent growth in its advances. The management stated that they witnessed credit demand from sectors such as pharma, auto, renewable energy, etc.

Other income that includes treasury, fee income, etc also rose 65 per cent to Rs 900.5 crore.

The management attributed this sharp rise in other income to treasury gains and corporate fee increases.

Asset quality of the bank remained stable as it managed to keep a check on its bad loans. Gross non-performing assets (NPAs) increased marginally to 0.79 per cent in the quarter ended June, compared with 0.76 per cent in the quarter ended March. In the same period, Net NPA was unchanged at 0.29 per cent. In line with this, provisions also showed only a slight uptick to Rs 206.6 crore, compared with Rs 186.5 crore in the previous quarter.

Rana Kapoor, managing director & chief executive officer, YES Bank, said the lender would be able to control its credit cost of 50-70 basis points that it had guided for earlier.

“There has been a de-risking in the economy but certain sectors such as iron and steel, power, engineering and construction continue to remain sensitive sectors,” he said. Net interest margin, a key indicator of a bank’s profitability, also improved by 10 basis points to 3.4 per cent. The management believes that the improvement in margin is driven by the expansion of the share of low-cost current and savings account deposits that has grown by 63 per cent year-on-year.