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Non-interest income lifts Yes Bank profit 33%
Private sector lender Yes Bank today posted a 33.3% growth in net profit at Rs 235 crore for the second quarter on the back of a healthy growth in its non-interest income, which offset a marginal dip in net interest margin.
Private sector lender Yes Bank today posted a 33.3% growth in net profit at Rs 235 crore for the second quarter on the back of a healthy growth in its non-interest income, which offset a marginal dip in net interest margin.
The city-headquartered bank''s net profit for the July-September of last fiscal was Rs 176.3 crore.
The bank''s non-interest income grew 63.4% to Rs 214 crore while the more important net interest income component was up 23.1% to Rs 385.6 crore.
Deputy Chief Financial Officer Jaideep Iyer said the bank closed good deals on its debt capital markets practice and overall financial advisory fees in the reporting quarter which helped growth, contributing to the spike in the non-interest income during the quarter.
However, income from the distribution vertical was "flat and stable", he said without giving absolute numbers.
However, the net interest margin dipped to 2.9% during the quarter from the 3% observed in the year ago period while sequentially, it showed an improvement of 10 basis points, he said, adding the percentage of cheaper Casa (current and savings account) deposits stood flat at 11.
Provisions stood at Rs 38 crore, and Iyer said it is wary of providing project finance to power companies, especially those having issues with fuel linkages, and auto ancillaries as the Motown is on a slowdown besides to the over-leveraged companies as an overall negativism sets in. Its net non-performing assets ratio improved to 0.04% as on September 30.
However, Iyer said in the next couple of months, the bank will launch auto and commercial vehicle finance products to drive up its retail segment, which accounts for only 14.9% of the book.
Additionally, it will also be introducing home loans as an add-on for customers to complete its product bouquet but will not acquire assets aggressively, he said.
Overall capital adequacy stood at 16% as on September 30 but the core tier-I capital slipped to 9.4%. However, the bank, which already has an enabling resolution from shareholders to raise capital, will not be raising any capital this fiscal because of poor market conditions, Iyer said.
But it is looking to raise up to Rs 300 crore through an issue for its tier-II capital needs this quarter, he said.
