Higher interest income boosts Yes Bank's June quarter profit

Net profit rises 28% to Rs 551 crore; asset quality weakens marginally

Salil Panchal
Published: Jul 29, 2015 05:31:17 PM IST
Updated: Jul 29, 2015 06:29:20 PM IST

Life is not a template and neither is mine. Like several who have worked as journalists, I am a generalist in my over two decade experience across print, global news wires and dotcom firms. But there has been one underlying theme in each phase; life gave me the chance to observe and tell a story -- from early days tracking a securities scam to terror attacks and some of India's most significant court trials. Besides writing, I have jumped fences to become an entrepreneur, as an investment advisor -- and also taught the finer aspects of business journalism to young minds. At Forbes India, I also keep an eye on some of its proprietary specials like the Rich list, GenNext and Celebrity lists. An alumnus of Xavier Institute of Communications and H.R College of Commerce and Economics in Mumbai, I have worked for organisations such as Agence France-Presse, Business Standard, The Financial Express and The Times of India prior to this.

Higher interest income boosts Yes Bank's June quarter profit
Image: Joshua Navalkar
Yes Bank CFO Rajat Monga

Private sector lender Yes Bank has reported a 27.7 percent year-on-year rise in net profit in the June quarter of FY16, beating market expectations. The earnings were led by a healthy growth in net interest income (NII) and other income.  But asset quality weakened further in the three-month period, data showed.

Yes Bank reported a net profit of Rs 551.2 crore in the first quarter of this fiscal, against Rs 431.6 crore in the year-ago period. Net interest income—the difference between interest earned and interest expended—was at Rs 1,059.8 crore, up 42.2 percent from a year ago. Other income (non-interest income) rose 31.8 percent to Rs 545. 2 crore, from Rs 413.6 crore in the year-ago period.

But the asset quality for the bank weakened a tad in the three-month period. Gross non-performing assets (NPAs) stood at 0.46 percent (Rs 368.3 crore), compared with 0.41 percent in the quarter ended March, 2015. At Rs 106.7 crore, net NPAs increased to 0.13 percent, from 0.12 percent in the previous quarter. Yes Bank’s chief financial officer Rajat Monga said, “The bank’s asset quality continued to show resilience in the quarter.”

Total restructured advances stood at Rs 567.1 crore as on June 20, 2015, representing 0.71 percent of the gross advances. Monga said that there was no sale to asset reconstruction companies (ARCs) in the quarter.

The bank’s loan book continued to expand, as sectors like renewables, agriculture, media and entertainment contributed significantly to the loan book. Advances grew 35.1 percent to Rs 79,665 crore, compared with Rs 58,988 crore a year ago and deposits rose 25 percent to Rs 95,316 crore, data showed.

Analysts called the earnings positive. Ravi Shenoy, vice president, midcaps research at Motilal Oswal Securities said: “The results were in line with expectations. This growth was on account of strong operating performance, with a rise in net interest income,” he said.

Kaitav Shah of SBICap Securities termed Yes Bank’s earnings “good” as the loan book grew and other income improved.

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