YES Bank on Thursday said its net profit for the quarter ended June 30 rose 38 per cent to Rs 216.1 crore from Rs 156.4 crore a year ago. Higher interest income and lower provisions contributed to the bank’s earnings.
The private sector bank, however, shrunk its balance sheet by 3.5 per cent sequentially because of a reduction in advances and deposits. Advances declined 3.7 per cent sequentially for the first time in 10 quarters. Deposits fell 5.1 per cent from a quarter ago. The size of the balance sheet, however, expanded 39 per cent from a year ago to Rs 56,963.6 crore.
The bank had adopted a cautious stance in offering loans, as the economic environment was uncertain, Rajat Monga, group president for financial markets and chief financial officer, said. However, he declined to comment on how long the bank would take to consolidate its balance sheet.
On an annual basis, the bank's advances grew 26 per cent to touch Rs 33,104.2 crore as of
June 30. Customer assets, or the bank's investments in non-convertible debentures and other debt instruments issued by companies, was Rs 4,348.8 crore.
Deposits were also up 44 per cent from a year ago at Rs 43,575.9 crore. The share of low-cost current account and savings account (Casa) deposits was at 10.9 per cent of total deposits.
Net interest income, or the difference between interest income and interest expenditure, rose 35 per cent from a year earlier to Rs 354.2 crore. The net interest margin narrowed 20 basis points from a year ago, but remained stable sequentially at 2.8 per cent.
“Once the policy rate rises stop, some stability comes in the rate environment and our Casa deposits growth accelerates further, I am confident our net interest margin would cross three per cent,” said Rana Kapoor, founder, managing director and chief executive officer.
The bank’s non-interest income rose 15 per cent year-on-year to Rs 165.3 crore during the quarter. The growth in transaction banking, financial advisory and branch banking fees aided the growth in non-interest income. Net provisions narrowed to Rs 1.5 crore from Rs 13 crore in the year-ago period, owing to a strong recovery and improving asset quality. The gross non-performing asset ratio rose by six basis points from the year-ago period to 0.17 per cent.
