Core income pushes Yes Bank Sept-qtr net up by 30%; NPA soars

A healthy growth in core interest income helped private sector Yes Bank today report a 30 per cent growth in the September quarter net at Rs 482.5 crore even as its bad loans surged.
The core net interest income grew 27.4 per cent to Rs 856.4 crore, while non-interest income inched up 13.3 per cent at Rs 505.6 crore.
Chief financial officer Rajat Monga said a gain of Rs 100 crore on interest rate swaps in a rising interest rate environment in Q1 last year has resulted in slower growth in non-interest income.
The bank was able to expand its net interest margins to 3.2 per cent from 2.9 per cent on rise in the low-cost Casa funds, which rose to 22.5 per cent from 20.46 per cent of the deposit base, he said, adding that higher proportion of the high yielding retail advances and recently-raised capital also helped expand NIM.

Monga said the bank saw a 0.30 per cent slip in both the cost of funds and yield on advances, during the quarter.
On the base rate, he said there is not enough room to manoeuvre right now, even though the cost of funds has come down a bit, and added the bank is yet to see a shift in the deposit rates that are a pre-cursor to a review on the lending rates side.

Unlike others like IndusInd bank and Kotak Mahindra Bank, which have decreased their savings bank account rates, Yes Bank is not considering any review, Monga said, adding, the bank is targeting to raise Rs 3,000 crore by the issue of the newly-created infra bonds by the end of the fiscal and will be seeking share-holder approval for the same during the quarter.

On the asset quality front, there was an increase in the gross NPAs to Rs 224 crore or 0.36 per cent from Rs 132.1 crore or 0.28 per cent. Monga said the worst is over on asset quality trouble and there will be a stability, if not an improvement in the asset quality from here on.
On the provisions front, Monga said the bank made an excess provision towards the counter-cyclical buffer because of the good quarter. The overall provisioning for the quarter was Rs 119.51 crore, including Rs 30 crore for counter- cyclical one, as against Rs 179 crore last year.

On the newly-launched home loans, its head of retail vertical Pralay Mondal said the bank is looking to primarily help meet its priority lending sector requirements and will be lending to affordable housing segment. It will also look at opportunities to cross sell to its account holders, he said, adding third-party arrangements, under which it sells Indiabulls Housing Finance and DHFL products, will continue for at least next two-three years.
The bank scrip gained 3.79 per cent to close at Rs 662.70 apiece on the BSE.