Yes Bank Q3 profit rises 21 pct on higher net interest income

Written by PTI | Mumbai | Updated: Jan 16 2014, 01:21am hrs
Yes BankYes Bank has recently received approval from the UAE central bank to set up a representative office in Abu Dhabi.
Private sector Yes Bank today reported a 21 per cent jump in net profit at Rs 415.6 crore in the December quarter (Q3) on account of higher growth in net interest income (NII).

In the year ago quarter, the mid-sized lender's profit after tax stood at Rs 342.3 crore.

"The results are primarily driven by a 14 per cent growth in net interest income, which stood at Rs 665 crore," Rajat Monga, Senior Group President (Financial Markets) and Chief Financial Officer of Yes Bank, told reporters.

In the year-ago quarter, NII stood at Rs 584.3 crore.

However, the net interest margin (NIM), a key gauge of profitability, declined to 2.9 per cent from 3 per cent in the year-earlier period. Monga expects the NIM to improve in the next two to three quarters.

Commenting on the results, Vaibhav Agrawal, Angel Broking Vice-President, said, "Non-interest income registered healthy growth of 24 per cent, aided by robust performance of financial markets segment (growth of 80%) and healthy performance in segments like retail and transaction banking."

The level of the bank's net non-performing assets doubled to 0.08 per cent of total advances in the third quarter ended December 31 from 0.04 per cent in the year-ago period.

Gross NPAs climbed to 0.39 per cent from 0.17 per cent. However, the bank reduced provisioning to Rs 132.9 crore from Rs 566.8 crore.

Explaining the lower Q3 provisions, Monga said, "The bank had taken full provisioning for all bond losses at that period in Q2. Therefore, in this quarter we had recoveries in those provisions.

"So, there has been about Rs 56 crore of write-back of provision on the cover of mark to market on the bond portfolio and correspondingly there has been Rs 70 crore addition to credit provisioning in different forms, which would be specific, general and counter cyclical."

Total deposits grew 20.7 per cent to Rs 68,059.9 crore in Q3, while advances rose 14.7 per cent to Rs 50,292.9 crore. Total restructured advances, excluding NPA, stood at Rs 107.2 crore as at December 31.

Yes Bank does not have any recast assets in the pipeline, Monga added.

Yes Bank's savings account deposits grew 55.4 per cent and CASA (current and savings accounts) expanded by 37.8 per cent in the quarter.

The private lender sold loans worth Rs 50-60 crore to an asset reconstruction company in the quarter, Monga said.

The bank, which currently has 517 branches, plans to add 100-150 more in the next 15 months.

Yes Bank recently received approval from the UAE central bank to set up a representative office in Abu Dhabi, which it plans to operationalise over the next six months.

About the bank's foray into the securities broking business, Monga said, "We have already done a soft launch. The initial investment is Rs 5 crore."