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Informist, Saturday, Jul 20, 2024

 

By Kabir Sharma

 

NEW DELHI – YES Bank's net profit of 5.02 bln rupees for Apr-Jun surpassed market expectations of 3.81 bln rupees on fall in provisions and strong growth in advances during the quarter. The bottomline rose 46.7% on year and 11.2% on quarter.

Provisions, other than tax and contingencies, for the Apr-Jun quarter fell 41.2% on year to 2.12 bln rupees. The provisions were down 55% sequentially.

 

The net profit of the private sector lender was also aided by a sharp increase in advances. At 2.30 trln rupees as on Jun 30, the net advances rose 14.7% on year and 0.8% on quarter. Advances to retail and small and medium enterprises continued to dominated the loan growth mix at 60% of the total advances. Advances to SMEs grew 23.8% on year and to mid corporates by 25%. Advances to corporates have shown a recovery with a growth of 13.8% on year.

 

As is the trend with YES Bank, deposits continued to outpace advances by a strong margin. Total deposits were 2.65 trln rupees as on Jun 30, up 20.8% on year but down 0.5% on quarter. Among deposits, the low-cost current account savings account ratio was 30.8% in Apr-Jun against 30.9% quarter ago and 29.4% year ago.

 

In terms of asset quality, gross non-performing assets ratio was 1.7%, unchanged from quarter ago. The net NPA ratio was 0.5% of advances, down 10 basis points from a quarter ago. The provision coverage ratio was 67.6%, up 100 bps on quarter.  

 

Interest income, the main source of income for the bank, grew 19.8% on year to 77.19 bln rupees. Net interest income rose at a slightly slower pace of 12.2% on year to 22.44 bln rupees. Net interest margin remained steady on quarter at 2.4% but was down 10 bps from 2.5% a year ago.

 

Non-interest income for Apr-Jun was up 20.5% on year at 11.99 bln rupees. 

 

The credit-deposit ratio of the bank rose slightly to 86.6% as on Jun 30 from 85.5% a quarter ago.

 

Recoveries and upgrades for the Apr-Jun quarter were 15.81 bln rupees. Momentum of resolving bad loans continues to be strong, the bank said in a press release. Gross slippages were at 12.1 bln rupees in Apr-Jun, down from 14.82 bln rupees a year ago and 13.56 bln rupees a quarter ago. Slippages, net of recoveries and upgrades, in Apr-Jun were 4.99 bln rupees compared with 8.08 bln rupees a year ago. 

 

Total expenses of the bank rose 18.7% to 80.33 bln rupees, in line with the total income. Interest expanded, the largest chunk of total expenses, rose 23.2% on year to 54.75 bln rupees in Apr-Jun. Cost to income ratio of the bank was 71.8%, down from 76.4% year ago but up 30 bps from a quarter ago.

 

Talking about the bank's investment in the rural infrastructure development fund, the management said that 25% of that investment, at around 110 bln rupees, is expected to mature in the current financial year.

 

The bank plans to open 30-50 new branches in the current financial year and aims for 16-17% growth in advances. 

 

The management refused to comment on media speculation about State Bank of India's stake sale in the bank. Officials said they had communicated with the Securities and Exchange board of India and the exchanges and there was no need to fuel the speculation further.

 

The Basel-III capital adequacy ratio of the bank was 16.3% as on Jun 30.

 

On Friday, shares of the bank closed 3.8% lower at 24.77 rupees on the National Stock Exchange.  End

 

Edited by Ashish Shirke

 

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