Earnings Review
YES Bank PAT beats view, doubles on yr due to lower provision
This story was originally published at 15:17 IST on 26 October 2024
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--YES Bank Jul-Sept net profit INR 5.53 bln vs INR 2.25 bln
--YES Bank Basel III capital adequacy ratio 15.6% as on Sept 30
--YES Bank gross NPA ratio 1.6% as on Sept 30 vs 1.7% qtr ago
--YES Bank Jul-Sept total income INR 91.37 bln vs INR 79.21 bln
--YES Bank net NPA ratio 0.5% as on Sept 30, unch vs qtr ago
--YES Bank Jul-Sept provisions INR 2.97 bln vs INR 5 bln
--YES Bank Apr-Sept net profit INR 10.55 bln vs INR 5.68 bln
--YES Bank Apr-Sept total income INR 180.55 bln vs INR 155.05 bln
--CONTEXT: YES Bank made provision of INR 125.1 mln on AIF invest in Oct-Dec
--YES Bank: Reversed provision of INR 102.9 mln made on AIF invest Jul-Sept
--YES Bank Jul-Sept net interest income INR 22.0 bln, up 14.3% on year
--YES Bank Jul-Sept net interest margin 2.4%, unch vs quarter ago
--YES Bank net advances INR 2.35 tln as on Sept. 30, up 12.4% on yr
--YES Bank current, savings account ratio 32.0% as on Sept 30
--YES Bank total deposits at INR 2.77 tln as on Sept 30, up 18.3% on yr
--YES Bank Jul-Sept fresh disbursements at INR 239.98 bln
--YES Bank NPA provision coverage ratio 70% as on Sept 30
--YES Bank Jul-Sept gross slippages INR 13.14 bln vs INR 12.63 bln yr ago
--YES Bank credit-deposit ratio 84.8% as on Sept 30
By Richard Fargose
MUMBAI – The net profit of YES Bank Ltd. for the September quarter surged 145.6% on year to INR 5.53 billion, far exceeding the market expectation of INR 4.91 billion. The bottom line was boosted by a sharp year-on-year drop in provisions. On a sequential basis, the net profit rose 10.1.
For the six months ended September, the bank's net profit stood at INR 10.55 billion and total income was INR 180.55 billion.
The private sector bank's provisions for non-performing assets nearly halved to INR 2.97 billion in Jul-Sept from INR 5.00 billion in the corresponding quarter last year. During Jul-Sept, the bank reversed provision of INR 102.9 mln made on investments in alternative investment funds. In Oct-Dec, YES Bank had made a provision of INR 125.1 mln on investment in alternate investment funds.
The bank's net profit was also supported by a steady increase in operating profit. The operating profit for Jul-Sept rose 21.7% to INR 9.75 billion. The bank's total income rose 15.4% to INR 91.37 billion, while total expenditure grew at a slower pace of 14.6% to INR 81.62 billion.
The interest earned rose 15.2% on year to INR 77.30 billion, and interest expanded was up 15.6% on year at INR 55.30 billion in Jul-Sept. The difference between interest earned and interest expended - the net interest income – rose 14.3% on year to INR 22.00 billion.
The bank's net interest margin for Jul-Sept remained steady on quarter at 2.40%, though it was higher than 2.3% a year ago.
Non-interest income of the bank in Jul-Sept was INR 14.07 billion, up 16.3% on year and 17.3% on quarter. The cost-to-income ratio was 73.0%, down from 74.3% a quarter ago and 74.4% a year ago.
At INR 2.35 trillion, the bank's net advances were up 12.4% on year and 2.4% on quarter as on Sept. 30. Advances to retail and small and medium enterprises continued to dominate the loan growth mix at 59% of the total advances. Advances to SMEs rose 25.8% on year and those to to mid-corporates were up 25.5%. Fresh disbursements in Jul-Sept were at INR 239.98 billion.
As is the trend with YES Bank, deposits continued to outpace advances by a strong margin. Total deposits were INR 2.77 trillion as on Sept. 30, up 18.3% on year. Among deposits, the low-cost current account savings account ratio was 32.0% as on Sept. 30 against 30.8% a quarter ago and 29.4% a year ago. The bank's credit-deposit ratio fell to 84.8% as on Sept. 30 from 86.6% a quarter ago.
Asset quality improved during the quarter, with the gross non-performing assets ratio at 1.6%, compared to 1.7% a quarter ago and 2.0% a year ago. The net NPA ratio remained unchanged on quarter at 0.5% of advances, but was lower than 0.9% a year ago. Gross slippages were at INR 13.14 billion in Jul-Sept, higher than INR 12.63 billion a year ago and INR 12.04 billion a quarter ago. The provision coverage ratio was at 70.0%, against 67.6% a quarter ago.
The bank's Basel-III capital adequacy ratio was 15.6% as on Sept. 30.
On Friday, shares of the bank closed 3.2% lower at INR 19.38 on the National Stock Exchange. End
Edited by Avishek Dutta
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