YES Bank net profit up by 30%

Higher net interest income and lower provisioning in the period under review helped the rise

Private sector lender YES Bank reported a 30 per cent increase in net profit to Rs 482.5 crore in the July-September quarter, compared to Rs 371.1 crore in the same period last year.

Higher net interest income and lower provisioning in the period under review has helped the rise.

Net interest income, the difference between the interest earned and expended, was up 27.4 per cent to Rs 856.4 crore at the end of the July-September quarter this year as compared to Rs 672.1 crore in the same period last year.

Provisions for bad loans fell by 33 per cent to Rs 120 crore in the second quarter from Rs 179 crore a year ago. In the same period, net non-performing assets increased marginally to 0.09 per cent from 0.04 per cent in the same quarter last year.

However, provisions were up by 403.4 per cent on a sequential basis

“Asset quality position is under control and going ahead, we will see more improvement. It was a three- to four-year long downturn in the economy. To see a major improvement, we will have to see some cyclical improvement. In this quarter (July-September), provisions were high as it was a buoyant quarter,” said Rajat Monga, senior group president, financial markets, and chief financial officer, YES Bank.

Out of the total provisioning, Rs 55 crore was on account of NPA while the rest was for standard provisioning, unhedged exposure and for counter cyclical reasons.

Other income that includes fees and commissions was up by 13.3 per cent to Rs 505.6 crore at the end of the July-September quarter, as compared to Rs 446.1 crore in the same quarter last year.

Net interest margin, a key indicator of bank’s profitability, has inched up to 3.2 per cent as compared to 2.9 per cent in the corresponding quarter last year.

Monga said the margins improved as the advances grew and also a result of the capital raising done in the April-June of this financial year. The bank had raised $500 milion via the Qualified Institutional Placement route in May this year.

Total advances for the bank grew by 30 per cent to Rs 62,029.6 crore at the end of September quarter and deposits in the same period grew by 18.6 per cent to Rs 80,130.9 crore..

The management said they expect the loan book to grow in the mid-20 per cent range this financial year.

The share of current and savings account deposits was 22.5 per cent of the total at the end of September. The capital adequacy ratio was 17.4 per cent according to Basel-III norms. The Tier-I capital adequacy ratio was 12.2 per cent

In the last quarter, the lender had taken board approval to raise long-term bonds of Rs 3,000 crore but is yet to take the shareholder’s approval.

Monga said they would be taking the approval this quarter and the bond would be issued by the end of this financial year.