- Banking, realty stocks fall on rate hike fears, Union Bank, Yes Bank shares plunge over 8 pctBuy Yes Bank shares as forex market stabilises, target price Rs 532: DaiwaBSE Sensex retreats from highs, top gainer Tata Power, Hero MotoCorp shares fallYes Bank quarterly net profit up 21 pct to Rs 371 cr
Yes Bank on Tuesday reported a 21.3% increase in net profit to Rs 371.1 crore for the quarter ended September 2013. Growth at the bank was supported by a 28.2% increase in net interest income to Rs 672.1 crore and a 61% jump in non-interest income to Rs 446 crore during the second quarter.
Despite fears of a contraction in quarterly net interest margin (NIM) for banks dependent on wholesale funding, Yes Bank managed to maintain NIM at 2.9% – a mere 10 bps lower than the previous quarter.
"NIM, as we expected under these circumstances, has contracted marginally by 10 bps from 3% to 2.9%. As we have mentioned in the past, over 75% of our loan book is floating rate loan book; so, we were able to contain the adverse developments of high interest rates by increasing our base rate on August 1,” said Yes Bank MD & CEO Rana Kapoor, adding that he does not expect any further compression in margins.
The bank took a mark-to-market hit of R112.6 crore on its bond portfolio due to the sudden surge in bond yields. Yes Bank added that this was a one-time hit as it has opted not to distribute the loss over the third and fourth quarters as permitted by the RBI.
The Yes Bank share surged in response to the earnings, closing up 13.5% at R372.10 on the Bombay Stock Exchange.
Gross non-performing assets at the bank grew 26% sequentially to R132.1 crore during the second quarter. However, as a ratio of total assets, gross NPA stood at 0.28%, up 6 bps from the April-June period. The net NPA ratio held largely steady at 0.04%. Kapoor acknowledged that slippages during the quarter were relatively high at R150 crore, but added that the bank had sold assets worth R95 crore to asset reconstruction companies.
The bank said there were no fresh cases of restructuring in the second quarter and total restructured advances stood at R125.5 crore as on September 30. Operationally, total advances grew 13.6% to R47,717.2 crore while deposits grew 29.2% y-o-y to R67,575.1 crore. The bank’s credit deposit ratio stood at 70.6% at the end of Q2.