Mumbai: Private sector lender Yes Bank Ltd posted a 75% increase in net profit to Rs140 crore in the quarter ended 31 March, buoyed by loan growth and an increase in other income.
Yes Bank for the first time declared a 15% dividend to shareholders.
Net interest income rose 62.9% in the fourth quarter to Rs244.20 crore from Rs149.80 crore in the year earlier on account of a 78.9% growth in advances, which stood at Rs22,193.10 crore at the end of the fiscal year.
The yield on advances fell to 9.7% from 13% and the cost of funds to 6.3% from 8.8%. The net interest margin widened to 3.2% from 3%.
“The advances growth has come from commercial banking, lending to mid-corporate, retail, and small and medium enterprises,” managing director and chief executive officer Rana Kapoor said.
Other income, or that generated by activities other than its main business, grew 68.3% to Rs160.10 crore from Rs95.10 crore as transaction banking and the financial advisory businesses grew. Transaction banking generated income of Rs43.20 crore, while that from financial advisory work was Rs57.80 crore. The financial markets business posted revenue of Rs47.40 crore, and third-party distribution and retail fees stood at Rs11.70 crore for the quarter. Operating profit rose 67.3% to Rs257.60 crore, from Rs153.90 crore.
Expansion plans: Yes Bank’s Kapoor says it plans to increase its branch network from 150 to 250 by June 2011. Kaushik Chakravorty / Mint
“We are in the process of rolling out our retail operations, which will focus on both secured and unsecured products in the consumer loans business, (besides) microfinance loans,” Kapoor said. “All products, including education loans and credit cards, will be rolled out over the next two years.”
The bank plans to increase its branch network from 150 to 250 by June 2011. “For this, the bank will have to incur a capex (capital expenditure) of around Rs60-75 crore,” Kapoor said.
The lender is also looking at increasing its workforce from 3,030 to 4,500 by the end of this fiscal that began on 1 April, he said. Its deposit base rose 65.7% to Rs26,798.60 crore, from Rs16,169.40 crore at the end of March 2009. Current and savings accounts stood at 10.5% of deposits at the end of March.
The bank plans to raise money this fiscal, Kapoor said.
At the end of March, the bank’s capital adequacy ratio was 20.61%, while net non-performing loans stood at 0.06% against 0.68% at the end of the previous year.
Its restructured advances have declined by Rs54 crore, Kapoor said. Restructured loans stood at Rs80 crore as on 31 March, down from Rs134 crore at the end of December.
“There are no major surprises in the results,” a banking analyst with a domestic brokerage said on condition of anonymity. “Yes Bank is predominantly a corporate bank and one will have to wait and watch to see how and when the retail business will contribute to the bank’s future income.”