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Last Updated : Oct 30, 2015 10:22 AM IST | Source: Moneycontrol.com

Yes Bank Q2 profit rises 26% despite asset quality concerns

Profit was estimated at Rs 593 crore and net interest income at Rs 1,085.8 crore for the quarter, according to analysts polled by CNBC-TV18.


Moneycontrol Bureau


Private sector lender Yes Bank's July-September quarter earnings beat analysts' expectations on Thursday. Profit increased 26.4 percent year-on-year to Rs 610.4 crore, driven by strong net interest income, other income and operating profit. However, higher provisions and tax cost limited profitability.


Net interest income, the difference between interest earned and interest expended, jumped 29.5 percent to Rs 1,108.5 crore in same period, boosted by credit growth.

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Profit was estimated at Rs 593 crore and net interest income at Rs 1,085.8 crore for the quarter, according to analysts polled by CNBC-TV18.


Yes Bank said advances grew by 29 percent Rs 80,015 crore and deposits increased by 24 percent to Rs 99,344.3 crore compared to same quarter last year, adding net interest margin inched up 10 basis points to 3.3 percent year-on-year but sequentially that remained flat.

Corporate banking business accounted for 68.2 percent of advances portfolio and the rest 31.8 percent constituted by retail & business banking.


"The bank continues to build granularity in deposits demonstrated by retail & CASA deposits contribution of 52.5 percent as on September 2015 on back of healthy SA deposits growth and with CASA crossing 25 percent for first time since inception of the Bank 11 years ago," Rana Kapoor, MD & CEO said.


Other income (non-interest income) during the quarter climbed 22.2 percent to Rs 618.1 crore led by retail banking fees and forex, debt capital markets & securities income. Operating profit increased 24.7 percent to Rs 1,019.1 crore compared to year-ago period.


Provisions for bad loans in quarter ended September 2015 stood at Rs 103.9 crore, declined by 13 percent year-on-year while increased 6.1 percent on sequential basis. Tax expenses were up 41.7 percent to Rs 304.8 crore during the quarter against Rs 215.09 crore in year-ago period.


Specific loan loss provision coverage was at 67.7 percent as at September 2015, declined compared to 71 percent in June quarter, 72 percent in March quarter and 75.8 percent in year-ago quarter.


Total standard restructured advances stood at Rs 569.3 crore at the end of quarter, which represents 0.71 percent of the gross advances, same as last quarter," the bank said in its filing.


There has been no sale to asset reconstruction companies during previous four quarters and also the bank has not refinanced any loan through 5-25 route, it added.


Asset quality weakened during the quarter as gross non-performing assets increased 15 basis points quarter-on-quarter and 25 basis points year-on-year to 0.61 percent in the quarter gone by. Net NPA rose 7 bps Q-o-Q and 11 bps Y-o-Y to 0.20 percent in same period.


In absolute terms, gross NPA climbed 33.4 percent sequentially and 121 percent on yearly basis to Rs 491.35 crore in quarter gone by. In same period, net NPA shot up 48.6 percent quarter-on-quarter and 194 percent year-on-year to Rs 158.6 crore.


Capital adequacy ratio declined to 14.1 percent in July-September quarter from 14.6 percent in June quarter and 16.6 percent in corresponding quarter of last fiscal.


Vaibhav Agrawal of Angel Broking says the bank's bottomline is better than expectation, but its outlook on asset quality will be key. Furthermore, Gaurang Shah of BNP Paribas says the bank should see some relief on NPA-front with the fall in interest rates.


At 12:45 hours IST, the scrip of Yes Bank was quoting at Rs 743.60, up Rs 14.30, or 1.96 percent on the BSE.



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First Published on Oct 29, 2015 12:01 pm
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