YES Bank Q1 net up 34% at Rs 290 cr on higher other income

Private sector lender YES Bank 's first quarter (April-June) net profit grew forecast beating 34% year-on-year to Rs 290 crore, aided by a whopping rise in the other income that upped 74% to Rs 288 crore during the three-month period. Net interest income or the difference between interest earned and paid out, increased more than 33% y-o-y to Rs 472 crore.

A poll estimate by CNBC-TV18 on an average had expected net profit at Rs 263 crore and net interest income at Rs 457 crore.

Financial advisory, transaction banking, financial markets and retail banking fees primarily added to the other income growth.

The bank's loan book expanded a little above 16% to nearly Rs 38,500 crore. Moreover, loans including credit substitute grew just double by 32% to Rs 49,400 crore. Net interest margin (NIM) remained unchanged at 2.8% in Q1, FY13.

Credit substitute (CS) is form of lending wherein the bank subscribes to non-convertible debenture or corporate bond issues of rated companies. The pace of loan growth in both the categories suggests that the bank is focussing more on CSs to ramp up its advances. 

"Bank has adopted a cautious approach to lending given the economic environment and hence the current loan mix stands at: Corporate & Institutional Banking accounting for 64.0% of the loan portfolio, Commercial Banking 20.2% and Branch Banking 15.8%," the lender wrote in a release.

Meanwhile, the scaling up of loan book came up with a fair share of bad assets as well. Its gross non-performing asset (NPA) ratio increased to 0.28% as against 0.22% in the previous quarter and 0.17% in the corresponding quarter of FY12. Net NPA ratio too was up at 0.06% compared with 0.01% in Q4, FY12 and 0.05% in Q1, FY12.

Total deposits rose 15% to Rs 50,210 crore. The current and savings account  (CASA) deposits shot up about 72% to Rs 8,170 crore. Consequently, the share of CASA to total deposits rose to 16.3% from 10.9% a year ago. Currently, Yes Bank is offering a maximum 7% rate of interest in its savings account deposits. It is so far, highest in the industry.

The bank restructured loan book stood at Rs 197 crore or 0.51% of its gross loans.

saikat.das@network18online.com