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
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