Yes Bank Q2 result, Profit up 31%; NII jumps 30%

Private sector lender Yes Bank's second quarter earnings surpassed analysts' expectations on Thursday, with the profit rising 31.3 percent year-on-year to Rs 801.5 crore despite higher provisions. 

Sequential growth was 9.5 percent. Net interest income, the difference between interest earned and interest expended, during the quarter grew by 30.5 percent to Rs 1,446.2 crore year-on-year on the back of robust growth in advances and CASA. 

Net interest margin inched up 10 basis points to 3.4 percent on yearly basis but on sequential basis, it was unchanged. Yes Bank said advances in Q2 registered a 37.7 percent growth year-on-year and 4 percent quarter-on-quarter while deposits grew by 28.9 percent and 4.4 percent in same periods. 

Corporate banking accounted for 67.9 percent of the advances portfolio, while retail & business banking constituted 32.1 percent during the quarter. Profit was estimated at Rs 770.1 crore and net interest income at Rs 1,379 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18. 

CASA (current-saving account) growth during the quarter was 53.2 percent YoY and 6.9 percent QoQ with CASA ratio crossing 30 percent mark for the first time to 30.3 percent (up 25.5 percent in Q2FY16), the bank said in its filing. Other income (non-interest income) shot up 43.6 percent to Rs 887.85 crore and operating profit rose by 36 percent to Rs 1,386 crore on yearly basis. 

Provisions for bad loans increased substantially by 55.6 percent year-on-year to Rs 161.7 crore but fell 21.7 percent sequentially. Provision coverage ratio improved to 64.8 percent at the end of September 2016 from 64.2 percent in September 2015. Cost to income ratio also improved to 40.6 percent from 41.1 percent while credit cost declined at 11 basis points against 15 basis points on QoQ basis. 

Asset quality was stable during the quarter with gross non-performing assets as a percentage of gross advances rose 4 basis points to 0.83 percent QoQ. Net NPA was unchanged at 0.29 percent during the same period. In absolute terms, gross NPAs for the quarter increased 8.5 percent to Rs 916.7 crore and net NPAs climbed 6.8 percent to Rs 323 crore compared with preceding period. 

Yes Bank said total standard restructured advances as a proportion of gross advances were at 0.46 percent in Q2FY17, down from 0.71 percent in same period last year with no additional restructuring during the quarter. During the quarter, the bank sold one account to an asset reconstruction company. 

Strategic debt restructuring outstanding exposure was 0.03 percent to gross advances at the end of September 2016, with no additional SDR during the quarter, the bank said, adding it refinanced one account through 5:25 route with outstanding exposure of 0.09 percent of gross advances.