A man walks under signage for Yes Bank Ltd. in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)  

Q1 Results: Yes Bank’s Profit Meets Estimates, Growth In Loans Spikes

Private sector lender Yes Bank reported a strong set of earnings for the first quarter of the current financial year, as its loan book expanded by more than 50 percent over last year.

Net profit jumped 30.5 percent year on year to Rs 1,260.3 crore in the quarter ended June, the Rana Kapoor-led bank said in an exchange filing today. Analysts tracked by Bloomberg had forecast a net profit of Rs 1,224 crore.

Net interest income, or the core income from operations, rose 23 percent over last year to Rs 2,219 crore, marginally missing the Rs 2,326 crore estimate.

Q1 Results: Yes Bank’s Profit Meets Estimates, Growth In Loans Spikes

Rapid Growth In Loan Book

The bank grew its loan book rapidly.

Advances rose 53.4 percent from last year to Rs 2.14 lakh crore across domestic corporates, international banking, MSME and retail segments. Retail banking advances more than doubled compared to the same quarter last year.

“Retail banking advances more than doubled to 14 percent of total advances, contributing 47 percent of incremental growth during the quarter,” the lender said in the release accompanying its filing.

The bank has accelerated growth in its loan book over the last three quarters, shows data collated by BloombergQuint. While it has maintained a growth rate of 30-35 percent since the start of 2016-17, the last three quarters have seen year-on-year growth of closer to 50 percent.

To keep pace with the loan growth, deposits grew 42 percent from last year to Rs 2.13 lakh crore. The ratio of current account and savings account deposits stood at 35.1 percent versus 35.7 percent last year.

The bank maintained its net interest margin at 3.3 percent versus 3.4 percent sequentially.

Asset Quality Indicators

The bank’s gross non-performing assets (NPA) ratio was at 1.31 percent compared to 1.28 percent in the previous quarter. The net NPA ratio stood at 0.59 percent compared with 0.64 percent three months earlier.

Provisions rose to Rs 625.7 crore compared with Rs 399.6 crore in the previous quarter because of mark-to-market losses and a higher provision coverage ratio, which stands at 55.3 percent compared with 50 percent in the previous quarter.

“Absolute provisions stood at Rs 625.7 crore in the period, out of which Rs 379.9 crore is made towards NPA provisioning. That amount is inclusive of Rs 149 crore provision made to increase the PCR (coverage ratio) to 55.3 percent,” Yes Bank said.

Gross slippages stood at Rs 560 crore for the quarter compared with Rs 380 crore in the previous three months. Of these, Rs 320 crore are expected to be recovered or upgraded in the second quarter, the lender said.

The bank said it recovered Rs 184 crore from one account classified under the first list of NCLT accounts. The lender has a residual exposure of Rs 23.4 crore to one account on the list. It has a total exposure of Rs 654.7 crore across seven accounts part of the second NCLT list.

Shares of the Mumbai-based lender fell as much as 6.7 percent, the most since October 2017, after the earnings announcement. The stock rose 11.4 percent in the April-June period compared with a 5.9 percent gain in the Nifty 50 Index.

Also read: Yes Bank Gets Final Regulatory Nod To Launch Mutual Fund Business