Robust growth in advances helped YES Bank post a net profit of Rs 191 crore for the quarter ended December 31, 2010, up 52 per cent from Rs 126 crore in the corresponding quarter last year.
The growth is supported by sustainable net interest income and improvement in non-interest lines of revenue, said Mr Rana Kapoor, Managing Director and CEO, YES Bank.
Net interest margin was lower due to rising cost of funds. Cost of funds increased to 7.1 per cent, from 6.7 per cent in the preceding quarter.
“We have raised lending rates by 200 basis points (100 bps hike in BPLR and Base Rate each) during this fiscal, but here is a lag effect on the re-pricing of loans,'' he said.
Margins will be maintained going ahead, thanks to a rise in both cost of funds and yields on advances. As 45 per cent of the loan book is on floating rate, the loans will get re-priced at higher rates, which will protect margins.
“It is a short-term compression in NIM. We expect to maintain NIM at 2.9 – 2.95 per cent for the current fiscal and reach 3 per cent by next fiscal,'' Mr Kapoor said.
may hike lending rates
The bank is likely to hike lending rates once again in the current quarter, but the quantum of hike will depend on the action taken by the central bank, he added.
The growth in advances came from sectors such as engineering, construction, healthcare, food and agri and also infrastructure. This fiscal, the bank is looking at 60 per cent growth in credit.
YES Bank's total exposure to the microfinance industry, including pool buyouts, was Rs 292 crore as on December 31, 2010, which is 0.94 per cent of total advances.
Shares of YES Bank closed at Rs 273.1, up 1.2 per cent, from the previous close of Rs 269.85, on the BSE, on Thursday.