Yes Bank profit rises 10% in June quarter
Net profit rose to Rs439.48 crore in the three months ended 30 June from Rs400.84 crore in the year earlier
Mumbai: Yes Bank Ltd said net profit in the three months ended 30 June rose 9.64% from a year earlier as loan-loss provisions dropped.
Net profit rose to ₹ 439.48 crore from ₹ 400.84 crore in the year-ago period, the bank said on Wednesday. That compares with the ₹ 453 crore first-quarter profit estimated by 27 analysts surveyed by Bloomberg.
Provisions fell 75.5% to ₹ 23.74 crore from ₹ 96.99 crore a year earlier.
Yes Bank chief financial officer (CFO) Rajat Monga explained the sharp fall in provision to a ₹ 43 crore write-back on its bond investments.
“Last year, we had provided for mark-to-market losses on bond investments after yields had jumped sharply. This year, we have written back some of that provision," Monga said.
Net interest income, the difference between what is earned on loans and paid on deposits, increased 13.1% to ₹ 745.34 crore from ₹ 659.11 crore the previous year. Net interest margin remained steady at 3%.
Non-interest income dropped 3.7% to ₹ 425.6 crore.
The bank reported gross non-performing assets (NPAs) of 0.33% compared with 0.31% in the previous quarter and 0.22% in the corresponding quarter last year.
Yes Bank shares fell 1.14% to ₹ 539.85 on BSE at 1.15pm, while the exchange’s benchmark Sensex gained 0.37% to 26,121.29 points and the banking index Bankex gained 0.49% to 17,749.22 points.
Both other income and operating profit dropped compared with last year’s, as this year it did not have an extraordinary gain on its fixed income portfolio.
“The operating profit is lower because of the high base effect, as we had a ₹ 125 crore gain on fixed income investment in the first quarter of last year. Adjusted for these gains, our net profit would have been higher by 18%," Monga said.
Demand for loans mostly came from companies, Monga said.
“Retail loan demand has been muted. Demand for loans has mostly been wholesale," he said.
The bank’s loan book grew 23% and 69% of loans went to large companies.
Yes Bank has taken a board approval to raise ₹ 3,000 crore from long-term infrastructure bonds and will now seek shareholder approval for the same.
“These bonds are expected to provide cheaper long-term funding to the bank and will enable the bank to significantly accelerate its affordable housing loan business..." Yes Bank said.
The Reserve Bank of India recently allowed banks to sell long-term bonds to lend to infrastructure and affordable housing projects after an announcement in the budget by the finance minister.
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