Strong net interest income growth lifts YES Bank profit by 19%
YES Bank’s net profit rose 19% year on year to Rs 126 crore in the October-December quarter due to strong growth in net interest income, which was, in turn led by a 71% loan growth.
YES Bank’s net profit rose 19% year on year to Rs 126 crore in the October-December quarter due to strong growth in net interest income, which was, in turn led by a 71% loan growth. Net interest income was up 69.5% at Rs 211 crore as on December 31, compared with Rs 124 crore a year ago. Total advances for the quarter stood at Rs 18,710 crore.
Loans to large corporates formed 72.6% of the total loan book, while medium-sized corporates formed 23%, and small and medium enterprises, along with retail consisted 4.3% of the total loan book.“We have had 79-80% of our growth from large and mid-sized corporates. Our advances were mainly to food, agriculture, telecom, media sector with growth biased towards infrastructure,” said Jaideep Iyer, deputy chief financial officer.“The bank is planning to increase its lending to SME sector and targets to lend 30-35% of total advances (to the sector) in next five years,” he added. The bank’s net interest margin improved to 3.1% in October-December from 2.8% a year ago. “Our NIMs crossed 3% due to improvement in current account and savings account ratio (CASA). We expect our NIM to pick up 10-15 basis points with every 1% increase in CASA,” Iyer said.CASA deposits grew 79.4% to Rs 2,229 crore, while term deposits grew by 61.1% to Rs 19,809 crore. The bank’s cost of funds fell 60-70 basis points sequentially, Iyer said. However, non-interest income was muted and transaction banking and financial advisory business fell to Rs 128 crore in October-December compared with Rs 189 crore a year ago.The bank has also adequately provided for loan-loss coverage ratio, which stood at 70.1% as on December 31. YES Bank reported a fall in its gross non-performing assets to 0.29% from 0.44% a year ago.The bank is also looking to raise $250 million through qualified institutional placements.“We have equity in our horizon as of now and we have approval to raise $250 million, which we may raise in next 3-4 months,” Iyer said. It raised Rs 300 crore through lower Tier-II bonds on Tuesday at a coupon of 9.65%, payable annually.Meanwhile sources said the bank is planning to start a private equity firm. However, the amount to be invested and other details are yet to be finalised.