Non-core income pushes Yes Bank net by 27%; NPA nearly doubles

Mid-sized private sector lender Yes Bank today reported a 27.4 per cent growth in March quarter net profit at Rs 702.1 crore aided by jump in non-interest income.
For the full year, the city-based lender posted a 26.6 per cent jump in profit at Rs 2,539.4 crore.
The core net interest income rose 27.1 per cent to Rs 1,241.4 crore on a 0.20 per cent expansion in net interest margin to 3.4 per cent and a loan growth of 30 per cent.
The bank's management exuded confidence in expanding the NIM by another 0.15 per cent on taking the share of low-cost casa deposits to a higher level and growing the PSL book to earn more.

Non-interest income rose 36 per cent to Rs 802.8 crore during the period, majorly on the performance of higher fees from the corporate banking vertical, Yes Bank's Managing Director and Chief Executive Rana Kapoor told reporters here.
Gross non-performing assets ratio nearly doubled to 0.76 per cent from 0.41 per cent in the year ago period and the fresh slippages were Rs 329 crore.

The share of restructured advances grew marginally to 0.53 per cent to Rs 524 crore.
Kapoor said the bank was successful in getting down the credit cost by 0.50 per cent at 0.80 per cent as against the earlier expectation of a 0.60 per cent reduction. It expects to get credit cost in the 0.50-0.70 percentage range this fiscal year.

Even though it did not have a single case of strategic debt restructuring, Kapoor opined that the route of taking management control in borrowing companies is not a viable solution for lenders.
The bank sold a cement account with an exposure of Rs 60 crore to an asset reconstruction company during the quarter, he said.
The core capital ratio came down to 10.7 per cent and the bank board also extended the approval for raising up to USD 1 billion in core capital by another year.
Stating that the current capital levels will support the targeted 27-30 per cent credit growth for another 12-18 months, Kapoor said the bank is confident of doing a transaction in two to three quarter to shore up its capital base, which is among the lowest amongst its peers.

The bank's board also decided to raise up to Rs 10,000 crore from debt market in tier-II capital.
Meanwhile, the bank said it has received markets regulator
Sebi's approval to start an asset management company and will be working on it for the next few months to enter the mutual fund space by early next fiscal.
Kapoor said the stress is on building business organically, but added that the bank is open to acquisitions that come along.
The bank will be launching a credit card next week which will complete its retail product suite. Kapoor said it will be launching seven variants of the card to target different categories.

The bank is witnessing surging demand from pharma, auto and renewable energy space, Kapoor said, adding that the international business unit at the GIFT City's loan book stands at USD 400 million at present that it looks to grow to USD 1 billion.
The bank scrip closed flat at Rs 1,200 on BSE as against a 0.17 per cent rise in the benchmark Sensex.