Despite its gross non-performing assets (NPA) more than doubling over the past year, Yes Bank on Wednesday reported a 33% year-on-year rise in its net profit for the June quarter to `731.80 crore, benefiting from a surge in non-interest income and higher net interest income.
The private sector lender’s total income for the quarter came in at `4,762.83 crore, over 25% higher than in the same quarter last year. Net interest income, the difference between interest earned and interest expended, rose to `1,316.60 crore from `1,059.80 crore last year, representing a growth of 24%.
As a result, the bank’s net interest margin (NIM) expanded by 10 basis points on a year-on-year basis, while sequentially, it remained unchanged. Non-interest income rose by more than 65% over the period under review to `900.50 crore, primarily on the back of rising bond prices and a surge in corporate banking fee income.
As on June 30, the bank’s total deposits stood at over `1.22 lakh crore, representing a rise of close to 29% from the end of the same quarter last year. Total advances grew by 27.5% to `1.77 lakh crore.
“The bank continues to witness a robust CASA growth with the CASA ratio improving to a healthy 29.6% from 23.4% a year ago demonstrating significant momentum in the underlying Retail franchise platforms, as well as ongoing mandate in several corporate relationship groups,” Rana Kapoor, managing director and chief executive officer at Yes Bank, said in a post-results statement. Over the period under review, the bank’s current account and savings account deposits (CASA) rose by 63% to `36,288.30 crore.
However, the quarter also saw Yes Bank report a significant worsening of its asset quality, with gross NPAs rising to `844.56 crore from `368.30 at the end of June last year. As a percentage of total loans, gross NPA rose to 0.79% as against 0.46% last year, while net NPAs grew to 0.29% from 0.13% earlier. Consequently, the bank’s provisions skyrocketed as well, more than doubling on a y-o-y basis to `206.63 crore.
Separately, Yes Bank announced that it had received an in-principle approval from the Securities and Exchange Board of India to sponsor a mutual fund and set up an asset management company (AMC) and a trustee company. Kapoor said the trust company and the AMC will be set up as wholly-owned subsidiaries of Yes Bank. The bank has already secured approval for the same from the Reserve Bank of India.
Sebi nod to mutual fund, AMC business
Yes Bank has received an in-principle approval from the Securities & Exchange Board of India to sponsor a mutual fund and to set up an asset management company (AMC), and a Trustee Company. The AMC and the trust company shall be set up as wholly owned subsidiaries of Yes Bank. The Bank has already identified senior leadership and technology architecture to establish this business, and will commence operations within 12 months. The AMC will channelise the savings of retail, corporate and institutional investors in equity and debt capital markets by leveraging Yes Bank’s knowledge banking expertise. The bank will simplify and integrate “manufacturing to distribution” of equity and debt investment products for all its customers.