Despite a sharp jump in provisioning for bad loans, private sector lender YES Bank, on Thursday, reported a 31 per cent year-on-year increase in its net profit for the quarter ended June 30, 2018.
Led by sharp growth in its retail business, YES Bank reported a net profit of ₹1,260.4 crore in the first quarter of the current fiscal, compared to ₹965.5 crore a year ago.
The total income of the bank grew nearly 43 per cent to ₹8,272.18 crore in the April-June quarter from ₹5,785.96 crore in the same quarter of 2017-18.
Net interest income also rose by 22.7 per cent to ₹2,219.1 crore in the first quarter of the fiscal from ₹1,808.9 crore a year ago.
Net interest margin, a key parameter to gauge the profitability of a bank, was at 3.3 per cent during the April to June quarter of the fiscal, slightly down from 3.7 per cent in the same period a year ago.
“The growth has been well segmented across corporate, IBU (IFSC Banking Unit), SME (small and medium enterprise) and particularly retail business, which grew 105 per cent year-on-year, taking the retail banking proportion in total advances to 14 per cent,” said Rana Kapoor, Managing Director and CEO, YES Bank.
However, the bank’s provisions for bad loans and contingencies shot up by 118.9 per cent to ₹625.65 crore in the June quarter from ₹285.78 crore a year ago.
NPA provisioning
Of this, the lender has allocated ₹379.9 crore as provisioning for non-performing assets (NPAs), which includes ₹149 crore towards increase in provision coverage to 55.3 per cent. Another ₹92.7 crore is towards mark-to-market (MTM) losses on bonds.
“MTM losses of ₹278 crore will be amortised during 2018-19 under the Reserve Bank of India dispensation,” the bank said in a statement.
Gross non-performing assets (NPAs), as a per cent of gross advances, rose to 1.31 as on June 30, 2018, against 0.97 per cent as on June 30, 2017, and 1.28 per cent in the quarter ended March 31.
Net NPAs rose to 0.59 per cent of net advances on June 30, 2018, from 0.39 per cent at the end of the first quarter of 2017-18. Net NPAs amounted to 0.64 per cent in the quarter ended March 31, 2018.
The lender said it has recovered ₹184 crore from one account (classified under NCLT List 1).
It now has residual exposure to only one account with an exposure of ₹23.4 crore, while in the NCLT List 2, its total exposure amounts to ₹654.7 crore across seven accounts.
The YES Bank scrip closed at ₹369.60 apiece, down 3.61 per cent over the previous close on the BSE.