Yes Bank profit up 33 percent on non-interest income growth

Mumbai: Private sector lender Yes Bank today posted a 33.3 percent growth in net profit at Rs 235 crore for the second quarter on the back of a healthy growth in its non-interest income, which offset a marginal dip in net interest margin.

The city-headquartered bank’s net profit for the July-September quarter of last fiscal was Rs 176.3 crore.

The bank’s non-interest income grew 63.4 percent to Rs 214 crore while the more important net interest income component was up 23.1 percent to Rs 385.6 crore.

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Deputy Chief Financial Officer Jaideep Iyer said the bank closed good deals on its debt capital markets practice and overall financial advisory fees in the reporting quarter which helped growth, contributing to the spike in the non-interest income during the quarter.

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However, income from the distribution vertical was “flat and stable”, he said without giving absolute numbers.

However, the net interest margin dipped to 2.9 percent during the quarter from the 3 percent observed in the year ago period while sequentially, it showed an improvement of 10 basis points, he said, adding the percentage of cheaper Casa (current and savings account) deposits stood flat at 11.

Provisions stood at Rs 38 crore, and Iyer said it is wary of providing project finance to power companies, especially those having issues with fuel linkages, and auto ancillaries as the Motown is on a slowdown besides to the over-leveraged companies as an overall negativism sets in.

Its net non-performing assets ratio improved to 0.04 percent as on 30 September.

However, Iyer said in the next couple of months, the bank will launch auto and commercial vehicle finance products to drive up its retail segment, which accounts for only 14.9 percent of the book.

Additionally, it will also be introducing home loans as an add-on for customers to complete its product bouquet but will not acquire assets aggressively, he said.

Overall capital adequacy stood at 16 percent as on 30 September but the core tier-I capital slipped to 9.4 percent. However, the bank, which already has an enabling resolution from shareholders to raise capital, will not be raising any capital this fiscal because of poor market conditions, Iyer said.

But it is looking to raise up to Rs 300 crore through an issue for its tier-II capital needs this quarter, he said.

PTI