Yes Bank Q3FY17 net profit rises 31% on-year to Rs 883 crore as margins expand

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Updated: January 19, 2017 3:49:09 PM

Yes Bank on Thursday said its net profit in the fiscal third quarter 2016-17 rose about 31% on-year to Rs 883 crore, beating most analyst estimates.

Yes Bank earned Rs 4,232 crore in interest during the quarter, up from Rs 3,376 crore in the corresponding period a year ago. (PTI)Yes Bank earned Rs 4,232 crore in interest during the quarter, up from Rs 3,376 crore in the corresponding period a year ago. (PTI)

Yes Bank Ltd’s net profit in the fiscal third quarter 2016-17 rose about 30.6% on-year to Rs 882.6 crore, primarily driven expansion in net interest margins, helped by efficiency and productivity gains, Managing Director and CEO Rana Kapoor said on Thursday.

The rise in net profit beat most analyst estimates, but the shares failed to recover losses, and were trading down 0.38% at Rs 1340.8 amid steady broader markets.

Its total net income for the Oct-Dec quarter grew 31.7% on-year to Rs 2,505.8 crore.
“Yes Bank has delivered another quarter of satisfactory performance across key financial parameters of growth and profitability driven by expansion in NIMs to 3.5%, while maintaining healthy asset quality,” Rana Kapoor said.
During the quarter, the private sector lender saw some slowdown in consumer and commercial retail lending, Kapoor said, adding that the MSME (micro, small and medium enterprises) segment is seeing some turnaround.

Better margins

The bank’s net interest margin (NIM) in the third quarter expanded to 3.5% from 3.4% in the preceding three months, growing at a premium to the industry average. The expansion in NIM was supported by consistent growth across all its business sectors, Kapoor said.

Yes Bank’s (NII) net interest income in Oct-Dec too was higher than the street estimates, rising 30.3% to Rs 1,507.5 crore, on account of strong growth in advances and CASA (current account, savings account) deposits, it said.
Its CASA deposits rose 63.3% on-year during the quarter following the demonetisation of high value currency notes, taking the CASA deposit ratio up to 33.3% in Oct-Dec from 26.6% in the same period a year ago.

Kapoor said that Yes Bank will achieve a CASA deposits ratio of 40% much ahead of its targeted date of March 2020. “With the momentum we have seen in deposits, and not only in the last quarter, I am confident that we will achieve it much ahead of the original objective,” Kapoor said.

Asset quality

Kapoor said that the bank had been able to preserve its healthy asset quality during the quarter.
Its net non-performing assets during Oct-Dec at 0.29% were flat on-quarter, but rose from from 0.22% in the same period previous year. Gross non-performing assets rose to 0.85% from 0.66% in the previous year and 0.83% in the preceding quarter.

Provisions for bad loans fell 22% on-year to Rs 115.4 crore in Q3FY17 from Rs 148 crore in the same quarter a year ago, and its provision coverage ratio as on December 31, 2016 was at 66% against 66.5% on December 31, 2015.
The company raised Rs 3,000 crore in the quarter through issue of perpetual bonds, augmenting its total capital adequacy to 16.9% (Basel III), with tier-1 capital adequacy at 12.2%. Its total advances at the end of December were at Rs 117,087 crore, up 38.7% on-year.

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