Yes Bank on Thursday reported net profits of R801.5 crore for the September quarter, up 31.3% year-on-year, beating analysts expectations. The rise in profits came from a higher net interest income,which rose 30.5% y-o-y to R1,446.2 crore. In Q1FY17, the bank’s net profit stood at R731.8 crore.
Analysts were expecting net profit of about R757.4 crore, according to Bloomberg consensus estimates. However, the net interest margins were flat on a sequential basis at 3.4% and also year-on-year.
“We are containing our NIM at 3.4% because significant part of our growth is coming from the success of our international banking unit, which helps us in doing foreign currency loans where margins are slightly thinner,” said Rana Kapoor, managing director and chief executive officer of Yes Bank.
Yes Bank stock rose 1.3% to close Thursday’s session at R1,308.80 on the Bombay Stock Exchange. The Sensex ended the day up 0.52% at 28129.84.The bank’s pre-provisioning profit rose 36% year-on-year to R1,368 crore.
Provisions rose to R161.7 crore, up 55.6% from a year earlier. The bank’s asset quality deteriorated slightly, with gross non-performing advances (GNPA) as a proportion of gross advances rising to 0.83% in Q2FY17, compared with 0.61%, a year ago and 0.79%, in Q1FY2017. Net non-performing advances (NNPA) as a proportion of net advances were up at 0.29%, up 9 basis points from a year ago and flat when compared to the last quarter.
Deposits grew 28.9% on a year-on-year basis to R128,023.8 crore. The bank’s current and savings account (CASA) deposits increased by 53.2% year-on-year to R38,784 crore, while the CASA ratio rose to 30.3% from 25.5 %, a year earlier.
“The bank achieved an important milestone with CASA ratio crossing 30% for the first time and this demonstrates improving productivity and efficiency of our retail liabilities and banking growth engines,” said Kapoor.
In September, Yes Bank deferred its plans to raise $1 billion, citing extreme volatility in trading, due to misinterpretation of new QIP guidelines.
“We continue to have an approval for a QIP from shareholders and the board, which is valid till June 2017. Going forward, we will pursue a QIP, whether that will be in tranches or in a single transaction – is still to be decided. We will try and time our QIP well before June,” Kapoor said.