YES Bank net up 21.3%

Bank to start retail broking business from Jan 2014

YES Bank on Tuesday said its net profit for the quarter ended September increased 21.3 per cent to Rs 371.1 crore, against the corresponding period last year, aided by higher interest income and growth in non-interest income.

Net interest income, or the difference between interest income and interest expenditure, rose 28.2 per cent to Rs 672.1 crore from the year-ago period. On a year-on-year basis, net interest margin remained flat at 2.9 per cent during the quarter. Non-interest income rose 61.2 per cent to Rs 446.1 crore during the quarter.

“YES Bank has delivered a satisfactory financial performance during the quarter,  amid a challenging macroeconomic environment. The bank has maintained robust asset quality, retaining high specific provision coverage, while further adding to the reservoir of counter-cyclical provisions,” said Chief Executive and Managing Director Rana Kapoor.

The bank’s gross non-performing asset (NPA) ratio deteriorated by four basis points year-on-year to 0.28 per cent; the net bad loan ratio improved by one basis point to 0.04 per cent. The bank’s specific provisioning cover stood at 85.3 per cent.

During the quarter, YES Bank restructured loans worth Rs 125.5 crore (excluding NPAs), or 0.26 per cent of its gross advances. It did not carry out any fresh restructuring during the September quarter.

The private lender, which received the Reserve Bank of India’s approval for equity broking business in September 2012, aims to commence this business in 2014. “By January 2014, we will launch our retail broking operations to complement our savings, as well as retail consumer strategy. The management team is in place,” Kapoor said. This business would be conducted through a new subsidiary.

The bank’s advances grew 13.6 per cent year-on-year to Rs 47,717 crore, while deposits increased 29.2 per cent from the corresponding period last year to Rs 67,575 crore. The share of low-cost current account and savings account deposits stood at 20.4 per cent.

Kapoor said the bank planned to make retail banking its “number one” business by 2020. “There is a significant commitment made to retail...I can assure you it will be at least 50 per cent as far as lending is concerned, and 65-70 per cent as far as the overall deposit reservoir is concerned,” he added.

Currently, corporate banking accounts for 67 per cent of YES Bank’s business.

At the end of the September quarter, YES Bank’s capital adequacy ratio stood at 15.6 per cent, according to the Basel-III norms. Its tier-I capital adequacy ratio was 9.5 per cent.

Litigation not to affect bank's performance

Rana Kapoor, managing director and chief executive officer of YES Bank, said the ongoing court battle was unlikely to affect the bank's performance. "It is not so relevant to the overall performance of the bank... These are things that happen in the life cycle of any organisation. And if there is a resolution, there will be one and you would hear about it. " Kapoor said.