YES Bank net profit up 35% on fee income

Riding on robust growth in fee income, YES Bank reported a 34.7 per cent year-on-year (y-o-y) rise in net profit at Rs 342 crore for the third quarter (October-December). The bank’s total income rose 40.5 per cent to Rs 897 crore, while net interest income was Rs 584 crore, rising 37 per cent. Fee income grew 48 per cent to Rs 313 crore during the period. Net interest margin (NIM) was three per cent for the quarter, 10 basis points sequentially.

“We expect NIMs to further strengthen this year as we expect the RBI to cut the repo rate by 75-100 basis points this year,” said Rana Kapoor, CEO and managing director.

The bank’s advances rose 22 per cent to Rs 43,857 crore and deposit growth was 20 per cent taking total deposits at Rs 56,400 crore. Though the bank has a healthy capital adequacy ratio (18 per cent, including 9.1 per cent Tier-I capital), Kapoor said the bank will raise capital this calendar year “as markets look conducive, particularly for Indian banks”.

YES Bank is one of the few lenders offering higher interest rates on savings account, after RBI regulated these rates last year. Its savings accounts grew by 308 per cent y-o-y to Rs 4,905 crore, taking the bank’s Casa (current and savings account) ratio to 18.3 per cent, up from 12.6 per cent in the corresponding quarter last year.

The lender also said it is open to acquiring Royal Bank of Scotland’s (RBS) retail assets in India, if the UK-based bank decides to sell them. “We would be receptive to such a development. Should there be a sale, we would certainly want to put our best foot forward,” said Kapoor. He, however, refused to talk on deal valuation and timeline for the deal.

“It is an important strategic decision at our bank. Should that crystalise, it helps to augment our retail strategy and also helps us acquire some well trained people whom we believe are a good cultural fit for our bank,” added Kapoor.

Last month, HSBC, which was initially in talks with RBS to acquire its retail operations, called off the deal as the Reserve Bank of India had not allowed RBS to transfer its branches to HSBC as a part of the deal.