Yes Bank Q3 Profit Matches Estimates, Asset Quality Improves

Yes Bank Ltd.’s profit matched analyst estimates for the December ended quarter while asset quality improved marginally.

The Rana Kapoor-led bank’s net profit rose 22 percent to Rs 1,077 crore as compared to a year ago, according to its exchange filing. Analysts tracked by Bloomberg had estimated the bottom line at Rs 1,062 crore.

Net interest income, or the core income of the lender, jumped 26.8 percent to Rs 1,889 crore, lower than the Rs 1,935 crore estimate. Net interest margins stood at 3.5 percent compared to 3.7 percent sequentially.

The growth was driven by continued improvement in the retail banking segment which has doubled to 11.8 percent of the loan book and a CASA ratio of 38 percent, Rana Kapoor, managing director and chief executive officer of the lender said in the press release accompanying the exchange filing. Yes Bank's balance sheet stood at Rs 2.5 lakh crore with a Rs 1.7 lakh crore loan book, at the end of the quarter.

Asset Quality Improves

The bank’s asset quality improved marginally in the third quarter after bad loans doubled in the three months ended September. Gross bad loan ratio stood at 1.72 percent compared to 1.82 percent in the previous quarter. Net bad loan ratio stood at 0.93 percent versus 1.04 percent.

Provisions for bad loans reduced marginally to Rs 421.3 crore from Rs 447 crore in the previous quarter.

In the previous quarter, Yes Bank had disclosed a significant divergence in the assessment of bad loans for the June ended quarter, between the lender and the Reserve Bank of India. The divergence stood at Rs 6,355 crore or three times the reported amount.

Exposure To IBC Accounts

The private lender has an exposure of Rs 1,342 crore to nine stressed accounts which are currently undergoing resolution at the National Company Law Tribunal under the insolvency code, it said in the press release.

The bank has provisioned for 51 percent of its aggregate exposure to stressed accounts identified by the Reserve Bank of India in its first list of likely defaulters and provided for 43 percent of aggregate exposure to RBI’s second list. One loan account of Rs 23.4 crore turned into a non-performing asset during the third quarter, Yes Bank said.

Here are the other highlights:

• Savings account deposits grew 45.4 percent
• Current account deposits grew 53 percent
• Total capital adequacy ratio stands at 19.5 percent
• Credit cost for the quarter stood at 18 basis points

Shares of Yes Bank rose 0.15 percent to Rs 342.75 apiece after the earnings announcement.