Private lender Yes Bank Ltd reported 38 per cent jump in net profit to Rs 401 crore in the April-June quarter owing to higher interest income, robust loan growth and improved margins. The net interest income of the bank rose 39.6 per cent to 659 crore in Q1 FY14.
In addition to the rise in interest income, the bank also saw its non-interest income (comprising income from transaction banking and investment banking) grow 53.4 per cent at Rs 442 crore in the reporting quarter.
Although the non-interest income from financial advisory, which includes income from investment banking, corporate finance advisory and other advisory income, increased 40.1 per cent to Rs 144 crore, its share in the total pie of non-interest income was reduced to second from being the largest contributor.
The bank saw a huge uptick in income from financial markets including FX sales, debt capital markets and trading income, which grew 84.2 per cent to Rs 174 crore in the reporting quarter.
As for other components of non-interest income, transaction banking stood at Rs 88 crore (27.2 per cent growth YoY) and retail banking fees & others at Rs 36 crore (67.9 per cent growth YoY). The non-interest income contributed over 40 per cent to the total net income ratio in Q1 FY14.
On loan growth, the bank saw its total customer assets (loans plus credit substitutes) grow by 24.2 per cent to Rs 61,260 crore. The bank, however, said the business cycle continues to be challenging.
“We are at an off-season for loan growth and it is at the slowest in this season. The growth will begin only in September. However, if the Reserve Bank of India continues its liquidity-tightening measures, loans would become costly, which might impact the loan growth,” the bank said.
Yes Bank, which offers competitive interest rates on its savings account, also managed to improve its CASA (current and saving account) mix to 20.2 per cent, with savings account contributing 10 per cent of the total. The bank said it would continue to witness strong traction in CASA and retail deposits on the back of enhanced savings rate offering, increased branch network and improvements in productivity.
During the quarter, net interest margin increased to 3 per cent as against 2.8 per cent in the corresponding quarter last fiscal.
Gross non-performing assets (NPAs) or bad loans declined marginally to 0.22 per cent from 0.28 per cent as on Q1 FY13. Net NPAs also reduced to 0.03 per cent (from 0.06 per cent).
Despite strong first quarter results, the bank’s scrip fell 12.63 per cent on Wednesday (the day the results were announced) in a weak Mumbai market.
The foreign institutional investment holding in the bank stands at 46.1 per cent as of June 30, 2013, from 48.9 per cent in the previous quarter.
Yes Bank’s other key shareholders include LIC, American Funds Insurance Series Growth Fund, Smallcap World Fund, Inc, JP Morgan Asset Management, Wasatch Funds, T. Rowe Price, Birla Sun Life MF, Franklin Templeton MF, Vanguard Emerging Market Funds, Bajaj Allianz Life Insurance and Reliance Life Insurance, among others.
Domestic mutual funds, Indian insurance firms and other Indian financial institutions also owned 15.4 per cent stake as of June 30, 2013.
(Edited by Sanghamitra Mandal)