Yes Bank’s Q4 Net Profit Beats Estimates; Asset Quality Improves

Yes Bank Ltd.’s net profit for the quarter ended March beat analyst estimates on improvement in the bank’s net interest income and asset quality.

The Rana Kapoor-led lender’s net profit rose 28.9 percent on a yearly basis to Rs 1,180 crore, according to its exchange filing. Analysts tracked by Bloomberg had estimated Rs 1,085 crore.

Net interest income, or the core income of the lender, rose 31.4 percent to Rs 2,154.2 crore, beating the Rs 2,034 crore estimate.

Retail banking advances rose to 12.2 percent of the the total loan book which stood at Rs 2.03 lakh crore at the end of the quarter. The bank is back at pre-GST and pre-demonetisation levels as far as retail loan book goes, Chief Executive Officer Rana Kapoor said in a press conference.

The CASA ratio, or the ratio of deposits in current and saving accounts to total deposits, rose 41.1 percent from a year ago to 36.5 percent, according to the press release accompanying the filing. The bank’s total deposits are now over Rs 2 lakh crore, Kapoor added.

Asset Quality Improves

The bank’s asset quality improved in the fourth quarter with the gross non-performing asset ratio at 1.28 percent compared with 1.72 percent in the previous quarter. Net bad loan ratio stood at 0.64 percent versus 0.93 percent.

Provisions for bad loans reduced marginally to Rs 400 crore from Rs 421.3 crore in the previous quarter. The provision coverage ratio currently stands at 50 percent and the lender plans to increase to more than 60 percent by September.

According to the bank’s disclosures, it had reported a Rs 6,355 crore divergence in gross NPAs for the year ended March 2017. By the end of financial year 2017-18, only Rs 485 crore worth of bad loans were added to the gross NPA pool. The bank declared that of the divergence, it saw Rs 2,434 crore worth of bad loans being repaid, while Rs 2,637 crore were upgraded to the standard category.

“Ten accounts from divergence were upgraded in October and then reviewed in January and March by the bank’s board and auditors,” Kapoor said.

Shares of the Mumbai-based lender rose as much as 7.5 percent to Rs 349.8 as of 3 pm.