YES Bank's Q3 net rises to Rs 231 cr helped by drop in loan-loss provisions

India's Yes Bank said third-quarter net profit more than quadrupled, helped by a drop in loan-loss provisions and healthy growth in loans, but the result still fell short of expectations.

The Mumbai-based private lender's standalone net profit rose to Rs 231 crore ($27.8 million) in the three months ended Dec 31, it said on Saturday. That was up from Rs 51.52 crore in the same period a year earlier.

Analysts, on average, had expected a net profit of Rs 343 crore, according to LSEG data.

YES Bank took a sharp hit on its third-quarter profit last year, as it set aside more provisions on its balance sheet after transferring bad loans to private equity firm J.C. Flowers.

Its net interest income, the difference between the interest earned on loans and that paid to depositors, rose 2.33 per cent to Rs 2017 crore.

The net interest margin, a key indicator of a bank's profitability, fell to 2.4% from 2.50% a year earlier, and the 2.30% reported in the prior quarter.

Most Indian private lenders, including HDFC Bank and ICICI Bank, have reported a drop in lending margins for the fiscal third quarter as deposits got re-priced higher amid tightened banking system liquidity.

Yes Bank's net advances grew 11.8% on year to Rs 2.18 trillion ($26.23 billion), led by retail loans, while deposits rose 13.2%.

Its gross non-performing asset (NPA) ratio was at 2% at the end of December, unchanged from the end of the previous quarter.

Provisions and contingencies, net of recoveries made against loan accounts written off as bad, fell to Rs 555 crore from Rs 845 crore a year earlier.

Shares of YES Bank ended 0.8% higher on Thursday ahead of the results. Friday was a public holiday in India.

($1 = 83.1150 Indian rupees)