Mid-sized private sector lender Yes Bank today reported a 30.6 per cent growth in its December quarter net at Rs 882.6 crore, primarily helped by an expansion in margins post-demonetisation.
The city-based lender had reported a post tax profit of Rs 675.6 crore in the corresponding October-December period last year.
A heavy influx of deposits into the low-cost current and saving account deposits, whose share rose 3 percentage points in a single quarter to 33 per cent of base, helped increase its net interest margin to 3.5 per cent for the quarter.
Its managing director and chief executive Rana Kapoor exuded confidence that these deposits -- it saw Rs 10,168 crore in cash deposits including Rs 8,068 crore of scrapped notes -- will stick longer and help the bank maintain the high NIMs.
The core net interest income rose 30.3 per cent to Rs 1,507 crore, while the non-interest income was up 33.8 per cent to Rs 998 crore.
Its advances rose 38 per cent on back of a steady pick up in the mid-corporate segment and the deposits were up 30.5 per cent during the quarter while the credit deposit ratio was 88.5 per cent.
Kapoor said there was a temporary effect on certain loan lines like micro loans, self help groups and auto following demonetisation, but said that pent-up demand in a majority of the categories is coming back.
Commercial vehicles and construction equipment will take more time to recover, Kapoor said, adding that he expects the negative impact of the note scrapping exercise to wear-off post-April.
On reports of its larger rival ICICI Bank blocking transactions on the PhonePe wallet (in which Yes Bank is a partner), Kapoor said such behaviour is not "conducive" to the growth of the Unified Payments Interface (UPI) platform and advocated a need to collaborate.
Asserting the bank has cornered a 40 per cent market share on the UPI platform, Kapoor termed this as "blips" caused by "one or two banks".
Kapoor said the bank will achieve its target of taking the Casa share to 40 per cent 18 months ahead of the stated timeline of March 2020.
The NIM will be at 4 per cent once it achieves the number, he said, adding that the bank has a room to increase the number by up to 0.40 per cent if its takes the high interest rate of 6 per cent on savings account at par with the industry.
Kapoor, however, was quick to clarify that the bank
has not decided to lower the offering, with an eye on benefits which accrue because of the high rates and added that the bank will "unleash" the power of raising its margins at the right moment.
The bank's capital adequacy ratio stood at 16.9 per cent as of December 31, 2016 with the core CET-1 at 12.2 per cent, Kapoor said, adding there is no urgent need to raise equity capital even though the shareholder approval for up to USD 1 billion is in place.
Its gross non performing assets ratio increased to 0.85 per cent on a Rs 89 crore slippage, while there was one asset with a Rs 193.5 crore exposure where there was a SDR.
Its credit costs have come at 0.34 per cent for the first nine months of the fiscal and Kapoor said it will either meet or better the target of 0.50-0.60 per cent for the fiscal.
The bank scrip closed 0.06 per cent up at Rs 1,347.15 a piece on the BSE as against a 0.19 per cent gains in the benchmark.
