YES Bank Q4 net profit climbs 29%

Galtero Lara
Abril 27, 2018

Private sector lender Yes Bank today reported a rise of 29 per cent in standalone net profit at Rs 1,179.44 crore in the March quarter of 2017-18. The bank had reported a net profit of Rs 1,225 crore in the corresponding quarter of the previous year. The bank, which was listed on the exchanges in 1998, had posted a profit of Rs 1,225.10 crore in the corresponding quarter previous year.

On the asset front, gross non-performing assets (NPAs) stood at 6.77 per cent of gross advances by the end of March 2018 against 5.04 per cent in year-ago period. The stock settled at Rs 352.05, up 8.23 per cent on the BSE and was the top gainer on Sensex and Nifty. The SME loans grew 19% to Rs 58,740 crore accounting for 13% of the net advances, while the corporate credit led by working capital loans grew 12% to Rs 17,446 crore.

Interest earned of the bank increased 32.05% to Rs 57.42 billion during the quarter from Rs 43.48 billion in the corresponding period past year.

On yearly basis, the net profit (consolidated) of the bank was up 26.7 percent to Rs 4,233.22 crore in 2017-18 as against Rs 3,339.89 crore in 2016-17.

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However, given the sharp bad loan divergences that the bank has reported for two consecutive fiscals (FY16 and FY17), and the uncertainty over the impact of the RBI's norms requiring banks to report one-day default, asset quality will need monitoring in the ensuing quarters as well. Net NPA for the quarter came in at 0.64 percent compared with 0.93 percent in the December quarter.

The Shikha Sharma-led bank saw its provisions and contingencies spiking almost threefold to Rs 7,179.53 crore in the fourth quarter against Rs 2,581.25 crore a year ago. In an interaction with the reporters Sharma said, "Credit risk area was a disappointment for the bank".

Earlier this month, Sharma's tenure was shortened by the bank's Board on Sharma's request from three years to seven months ending December 2018. "During the quarter, we have taken a very conservative view of the recent regulatory changes and have executed all the necessary NPA recognitions", said Sharma.

We believe the new NPA formation in this financial year will be significantly lower. Net interest margin for FY18 came in at 3.44 per cent. He added that this would keep credit cost at an elevated level in FY19. It is also looking for a new chief after Shikha Sharma retires on December 2018 following the Reserve Bank of India's (RBI) instruction asking the bank's Board to cut short her fourth term.

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