YES Bank April-June Profit Jumps Nearly 60% On-Year, Beats Estimates

YES Bank Ltd.'s net profit surged nearly 60% on year in the April-June quarter to ₹8.01 million, driven by a sharp rise in other income and lower sequential provisions. The profit was also up 8.5% on quarter, marking the bank’s highest quarterly net profit since its reconstruction.

Brokerages had estimated a net profit of ₹6.20 million for the quarter.
Other income jumped 46% on year to ₹17.52 million and rose 0.7% from the previous quarter. Total income for the quarter stood at ₹93.48 million, up 4.8% on year, and broadly flat compared to ₹93.55 million in the previous quarter.

Net interest income rose 5.7% on year and 4.2% sequentially to ₹23.71 million, beating the average estimate of ₹22.34 million. The net interest margin was steady on quarter at 2.5%, and up from 2.4% a year ago, aided by reduced deposits for priority sector lending and a cut in savings rates.

Provisions rose 34.1% on year to ₹2.84 million but fell 10.7% sequentially. The provision coverage ratio improved to 80.2% as of Jun. 30 from 79.7% in the March quarter and 67.6% a year ago.

Gross NPAs stood at 1.6%, flat on quarter and down 10 bps on year, while net NPAs were unchanged at 0.3%, down 20 bps from the year-ago period.

Gross slippages rose to ₹14.58 million from ₹12.23 million in the March quarter. Recoveries and upgrades stood at ₹11.70 million, including ₹3.38 million from security receipts.

The bank’s return on assets improved to 0.8% in the June quarter from 0.7% in the previous quarter and 0.5% a year ago. The cost-to-income ratio fell to 67.1% from 67.3% in Jan-Mar and 74.3% a year ago.

Net advances grew 5% on year but fell 2.1% on quarter to ₹2.41 trillion. Retail loans made up 49% of the loan book, followed by 26% from corporate and institutional banking. Disbursements dropped 10.4% on year and 32.2% on quarter to ₹188.12 billion.

Yield on advances fell to 9.9% from 10.1% in the previous quarter, while cost of funds eased to 6.3% from 6.4%.

Total deposits rose 4.1% on year to ₹2.76 trillion but declined 3.1% on quarter. The credit-deposit ratio increased to 87.4% from 86.5%, while the CASA ratio dipped to 32.8% from 34.3%. The cost of deposits declined 20 bps on year and quarter to 5.9%.

Japan’s Sumitomo Mitsui Banking Corp., which holds a 20% stake in YES Bank, has sought RBI’s nod to raise its holding by an additional 4.9%.