YES Bank June-quarter net up 38%; beats forecast

YES Bank June-quarter net up 38%; beats forecast

Mumbai: India’s private sector lender YES Bank, in which Rabobank holds nearly 5% stake, beat street estimates with a 38% rise in first-quarter profit, led by higher income from operations, stable loan growth and asset quality.

The bank said its net profit in the June quarter rose to Rs216 crore from Rs156 crore a year ago. Its net interest income (NII) grew 35% to Rs354 crore.

A Reuters poll had projected net profit at Rs209 crore and NII of Rs370 crore.

The lender said its advances grew 26% from a year ago while deposit grew 44.1% during the quarter.

Most Indian banks, including top lenders State Bank of India and ICICI Bank have seen a rise in loan demand in the past few quarters in Asia’s second fastest growing economy.

However, high interest rates have eased demand for credit since the beginning of the fiscal year in April.

Indian banks’ credit grew 3.7% in the three months ended June compared with 5% a year ago, while deposits grew a faster 5.5%, according to latest Reserve Bank of India (RBI) data.

The RBI is expected to raise its key policy rate by a further 25 basis points next week after inflation quickened in June and may hike once more by the end of the year, before pausing its long tightening campaign, a new Reuters poll shows.

YES Bank, in which HSBC Global Asset Management holds 4.8%, said its net interest margin in the quarter was 2.8%. It did not give year-ago comparable figure.

Net non-performing asset as of 30 June was mostly stable at 0.01%.

Earlier in the week, India’s No. 3 lender HDFC Bank beat net profit estimates on stronger loan growth but warned loan growth for new projects could be muted.

YES Bank’s bigger rival Kotak Mahindra also posted a rise in net profit. At 12.53 pm, shares of YES Bank, which the market values at nearly $2.5 billion, were down 0.3% at Rs317.8.

They rose 0.8% during the quarter outperforming a 3% fall in the benchmark BSE index. The BSE bank index has fallen 3.6% in the period.