Yes Bank Beats the Street with 27% Jump in Profit

As­set qual­ity de­te­ri­o­rated slightly, while pro­vi­sion­ing saw a con­sid­er­able rise; the bank has an­nounced a div­i­dend of 10/share

The Economic Times - - Smart -

Mum­bai: Private lender Yes Bank on Wed­nes­day re­ported a 27.4% in­crease in fourth-quar­ter net profit, beat­ing mar­ket ex­pec­ta­tions. Here are five things you need to know about Yes Bank re­sults:

Net profit rose to ₹ 702 crore from ₹ 551 crore a year ear­lier. A Bloomberg poll of an­a­lysts had es­ti­mated the profit at ₹ 682.10 crore. Chief ex­ec­u­tive Rana Kapoor said the bank achieved the re­sults “de­spite fairly de­mand­ing eco­nomic con­di­tions”.

Net in­ter­est in­come, or the dif­fer­ence be­tween in­ter­est earned on loans and that paid for funds, rose 27.1% to ₹ 1,241.4 crore. Net in­ter­est mar­gin (NIM) ex­panded to 3.4% from 3.2% a year ear­lier. The bank is aim­ing to im­prove its mar­gins by at least 10-15 bps in the cur­rent fis­cal. “We can im­prove our NIMs by the im­prov­ing base of cur­rent ac­count sav­ings ac­count de­posits, do­ing more pri­or­ity sec­tor lend­ing our­selves than buy­ing it and by is­suance of more green bonds which will give us cheaper source of fund­ing,” Kapoor said.

As­set qual­ity slightly de­te­ri­o­rated, with net non-per­for ming as­sets (NPAs) ris­ing a tinge to 0.29% in the quar­ter from 0.22% three months ear­lier. Gross NPAs rose to 0.76% from 0.66%. Pro­vi­sion­ing rose con­sid­er­ably, mainly due to the cen­tral bank-or­dered as­set qual­ity re­view — it set aside ₹ 186.5 crore against stressed loans, up nearly 48% from a year ear­lier. For the cur­rent fi­nan­cial year, the bank pro­vided a credit cost guid­ance of 50-70 bps. It main­tained credit cost at about 50 bps, as against its guid­ance of 50-70 bps, in FY16.

Its board ap­proved a pro­posal to raise $1 bil­lion via eq­uity and ₹ 10,000 crore via debt. It an­nounced a div­i­dend of ₹ 10 per share for the past fis­cal year.

The bank is aim­ing to im­prove its mar­gins by at least 10-15 bps in the cur­rent fis­cal

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