YES Bank is curtailing its branch, ATM expansion plan as digital initiatives pick up
Mid-sized private sector banks are reporting higher profits on the back of robust growth in advances and fee income.
On Wednesday, YES Bank reported a 31.9% rise in its net profit to Rs 965.5 crore. The bank is also curtailing both its branch and ATM expansion plan as digital initiatives pick up.
Total advances grew by 32.1% to Rs 139971.8 crore on the back of robust growth in both corporate and retail advances. The corporate book is at 70% while the remaining is retail advances.
The gross non-performing advances of the bank were at Rs 1364.4 crore. The bank also said that it has fully acknowledged all the non-performing assets (NPA) divergence of Rs 4925.6 crore six times higher than the reported gross non-performing assets at Rs 748.9 crore.
The bank had earlier planned to have 2,500 branches by 2020 but now that number is brought down to 1,800 branches. Even the ATM expansion will come down.
Rana Kapoor, chief executive officer and managing director, said, "Most of that was recovered or written off during the course of the year with a net figure of Rs 1,040 crore. Of this, Rs 911 crore was from a single account where 60% recoveries have taken place and the remaining is expected in the second quarter."
The board has approved stock split in the ratio of 1:5, subject to approval from shareholders and RBI.
The YES Bank share price closed 6.1% higher at Rs 1712.55 on the BSE.
Similarly, Kerala-based Federal Bank reported 26% increase in net profit year-on-year at Rs 210.15 crore for the quarter ended June 2017. The total business of the bank grew 23% to Rs 1,72,145.95 crore with deposits going up 18% to Rs 95,838.84 crore and advances rising 29% to Rs 76,307.11 crore.
The bank's gross net-performing assets (NPAs) stood at Rs 1,867.94 crore as against Rs 1,747.31 crore. However, provisioning for bad loans and contingencies rose to Rs. 236.44 crore for April-June of 2017-18 from Rs 168.48 crore a year ago.
The share of the bank closed 3.57% lower at Rs 114.80 on the BSE.
IN POLE POSITION
- YES Bank is curtailing its branch, ATM expansion plan as digital initiatives pick up
- Federal Bank’s total business grew 23% and its advances rose 29%
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