YES Bank on Wednesday reported a 31.9% year-on-year jump in its net profit for the first quarter of FY18 to Rs 965.52 crore on the back of a strong growth in its loan book and lower provisioning for bad loans. The private-sector lender said its board has approved splitting one equity share into five, subject to the approval from its shareholders and the Reserve Bank of India (RBI). “The first quarter has been an extremely satisfactory quarter in almost all respects – P&L outcomes, balance sheet growth and most of all on asset quality outcomes,” managing director and CEO Rana Kapoor told reporters at a press conference. During the quarter, the bank’s net interest income – the difference between interest earned and interest expended – grew 44% to Rs 1,808.8 crore. Its net interest margin improved by 3 basis points to 3.7%.
The bank saw a sharp sequential decline in its non-performing assets (NPAs) due to a significant recovery in one cement account that was classified as NPA in the fourth quarter of the last fiscal year. The account – Jaiprakash Associates – had received approval in June to complete sale of a part of its cement business to Ultratech Cement for Rs 16,189 crore. While gross NPAs declined by 55 basis points from the previous quarter to 0.97% in the June quarter, net NPAs fell by 42 basis points to 0.39%.
On a year-on-year basis, gross NPAs increased by 18 basis points and nets NPA rose by 10 basis points. Total provision during the quarter stood at Rs 285.78 crore, lower than Rs 309.73 crore in the previous quarter, but higher then Rs 206.63 crore inthe corresponding period last year. YES Bank said it has recovered `545.6 crore from Jaiprakash Associates, 60% of the total exposure to the account, in the June quarter. The bank recovered another Rs 37 crore in July, and the remaining amount is likely to be recovered in the July-September quarter, Rana Kapoor said. A provision of Rs 227.9 crores has been retained against the remaining exposure, which is in line with the RBI guidelines, he added.
“If you net out the holding for this account that has become sustainable post the divestment towards the end of June, which is 26 basis points, the gross NPA actually comes down to 0.71%,” Kapoor said. Similarly, the credit cost, which stood at 18 basis points, would come down to 11 basis points if the holding cost for this account is removed, Kapoor said. The provision coverage ratio stood at 60% at the end of June.
During the quarter, YES Bank saw a 32.1% year-on-year increase in advances to Rs 1.4 lakh crore on the back of a robust growth in both corporate and retail businesses. Total deposits grew 22.6% year-on-year to Rs 1.5 lakh crore. Low-cost savings account and current account deposits stood at 36.8% of total deposits.