Mumbai: Yes Bank Ltd’s fiscal second quarter profit rose 31.3% from a year ago on higher net interest income and other income. Net profit rose to Rs801.54 crore for the quarter ended 30 September from Rs610.41 crore a year earlier.
According to a Bloomberg poll of 18 analysts, the bank was expected to post a net profit of Rs757.40 crore.
Net interest income (NII), or the core income a bank earns by giving loans, rose 30.5% to Rs1,446.17 crore in the September quarter from Rs1,108.47 crore last year.
Other income increased 43.6% to Rs887.85 crore from Rs618.10 crore in the same period last year. Net interest margin widened to 3.4% from 3.3% a year ago.
Gross non-performing assets (NPAs) at Yes Bank rose 8.54% sequentially to Rs916.68 crore at the end of the September quarter. On a year-on-year basis, gross NPAs jumped 87% from Rs491.35 crore. As a percentage of total loans, gross NPAs was 0.83% at the end of the September quarter, compared with 0.79% in the earlier quarter and 0.61% a year ago.
Provisions and contingencies fell 22% to Rs161.67 crore in the quarter from Rs206.63 crore in the preceding three months.
On a year-on-year basis, provisions jumped 56% from Rs103.94 crore.
“We are containing our NIM at 3.4% because significant part of our growth is coming from the success of our international banking unit which helps us in doing foreign currency loans where margins are slightly thinner,” said Rana Kapoor, managing director and chief executive, Yes Bank.
“Cumulative credit cost is 27 basis points. We expect the credit cost for the year to remain below 60 basis points,” added Kapoor.
Total deposits rose 29% from a year ago to Rs1.28 trillion, while total advances rose 38% to Rs1.10 trillion.
The board approved raising $1 billion via qualified institutional placement and Rs10,000 crore via issuance of debt securities.
While the bank has performed on all parameters, the next leg of growth depends on the banks ability to raise capital on time, said Siddharth Purohit, an analyst at Angel Broking.
“We believe the required capital will be raised in tranches. Operationally the bank has delivered very good set of results, but looking at valuations of 2.9x, its fiscal year 2018 expected adjusted book value, we believe the near term upside on the stock could be limited. We have a neutral rating on the stock,” said Purohit.
Yes Bank’s share rose 1.31% to Rs1,308.80 on BSE, while the exchange’s benchmark Sensex rose 0.52% to 28,129.84 points.