YES Bank Q4 Results: Profit Rises 63% On Fall In Provisions, NII Rises 5.7%

A fall in provisions helped Yes Bank Ltd. report a 63% rise in net profit on a year-on-year basis to Rs 738 crore for the quarter ended March. Sequentially, the bottom line rose 20.55%.

Provisions and contingencies of the bank fell over 32% on year and 23% on quarter to Rs 318.07 crore. A rise in other income also aided the bank's profit after tax. It rose 11% on the year to Rs 1,739 crore.

Net interest income rose 5.7% on the year to Rs 2,276 crore. Consequently, net interest margins of the bank were up by 10 basis points on the quarter and on the year to 2.5%.

Asset quality remained stable during the quarter ended March. The gross non-performing assets ratio of the bank remained the same at 1.6% on a sequential basis. Net NPA fell to 0.3% from 0.5% in the previous quarter.

Retail slippages of the bank were Rs 1,101 crore, slightly lower than Rs 1,174 crore reported in the prior quarter but higher than Rs 977 crore a year ago.

Overall, gross slippages of the private sector bank fell to Rs 1,223 crore in the March quarter as against Rs 1,356 crore a year ago and Rs 1,348 crore a quarter ago.

Net advances of the bank grew over 8% on year to Rs 2.46 lakh crore. Retail advances of the bank were Rs 1.01 lakh crore at the end of the March quarter, higher than Rs 99,805 crore a quarter ago but lower than Rs 1.05 lakh crore a year ago.

The bank intends to keep its loan growth target in the range of 12-15% on year in the current financial year, Managing Director and Chief Executive Officer Prashant Kumar said in the post-earnings conference call.

He also said that the bank would like to see deposit growth slightly higher than loans.

When asked about the bank's approach towards high yielding products, Kumar said that the bank is not chasing 'very high risk-high yield' loan products. Instead, they are keen on growing better yielding loans, which will allow it to control risk.

The retail, small and medium enterprises and mid-corporate book mix was 59:17:24 at the end of the March quarter, as against 62:15:23 in the same period a year ago and 58:16:26 in the last quarter.

Total deposits of the bank were nearly 7% higher on the year, at Rs 2.84 lakh crore.

The current account and savings account ratio was 34.3% in the March quarter against 33.1% a quarter ago and 30.9% a year ago.

Credit deposit ratio of the bank was 86.5%, lower than 88.3% a quarter ago and 85.5% a year ago.

Separately, the bank also said that it has cut the interest rate on its savings account, which will come into effect from Monday.

The revised rates would be for balances up to Rs 10 lakh. For deposits of Rs 10-25 lakh, the rate of interest will be 3.5% and it will be 4% for those between Rs 25 and Rs 50 lakh. Balances above Rs 50 lakh will attract a rate of interest of 5%, down from 7% earlier.

When asked whether this will have an impact on the bank's CASA ratio, Kumar said that YES Bank's focus is to cut cost of deposits.

“We would be able to protect our CASA ratios and at the same time reduce the cost of deposits,” he said.