YES Bank posted a 10 per cent rise in net profit at ₹440 crore in the first quarter ended June 30, 2014 as against ₹401 crore in the year ago period on the back of stable interest income and loan growth.

Lower provisions, which fell 75.5 per cent to ₹24 crore (including provision towards unhedged exposure of ₹19 crore) against ₹97 crore in the year-ago period, also aided profit growth.

Retail lending The mid-sized private bank’s net profit was restricted due to the drop in operating profit and non-interest income.

Net interest income — the difference between interest earned and that expended — grew 13 per cent, at ₹745 crore. On the other hand, non-interest income dropped 4 per cent to ₹426 crore from ₹442 crore.

Rajat Monga, Chief Financial Officer, said income from treasury had dropped due to a rise in bond yields.

He added that retail lending was muted because of seasonal factors, though it should see a more “constructive pick-up” over the next three quarters.

Total advances grew 23 per cent year-on-year while deposits rose 17 per cent as on June 30, 2014.

“Advances growth came largely from corporate loan book…We should not see acceleration in bad loans…,” Monga said.

Gross NPAs increased to 0.33 per cent as at June end 2014, from 0.22 per cent a year ago, while net NPAs increased to 0.07 per cent (₹43 crore) from 0.03 per cent (₹12 crore).

Net interest margins (NIM) remained flat at 3 per cent. “We have more equity (raised about ₹3,000 crore via QIP). So, hopefully, we should see the NIM increasing by 10-15 basis points next year,” Monga added.

The YES Bank scrip ended weaker at ₹536.65 per share, down by 1.7 per cent over its previous close.

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