YES Bank Q3 net profit up 33%

YES Bank, the youngest private bank in the country, today said its net profit for the quarter ended December 31, 2011 expanded 33% to Rs 254 crore from Rs 191 crore a year ago.

Higher interest income from advances, growth in non-interest income, and lower provisions aided the bank's earnings growth.

Net interest income, or the difference between interest income and interest expense, grew 32% year-on-year to Rs 428 crore during the quarter. Net interest margin narrowed 10 basis points sequentially to 2.8% as cost of deposits increased driven by hike in the lender's savings deposit and non-resident deposit rates.

YES Bank currently offers the maximum rate among all banks on savings deposits. It offers 7% on savings deposits above Rs 100,000 and 6% on deposits up to Rs 100,000.

"The increase in savings account rate coupled with alignment of fixed deposit rates for non-resident Indians with domestic fixed deposit rates are clear competitive differentiators, and will facilitate achieving our Version 2.0 liability goals evidenced by robust momentum in CASA (current account savings account) during the quarter," Rana Kapoor, founder, managing director and chief executive of the bank said.

Share of CASA deposits in total deposits improved to 12.6% as of December-end from 11% a quarter ago. Total deposits expanded 19% year-on-year to Rs 46,929 crore. Advances were up 15% from a year ago at Rs 35,868 crore.

Asset quality improved with both gross and net bad loan ratios declining marginally from a year earlier. The bank closed the quarter with a capital adequacy ratio of 16.1%.