Yes Bank’s provisions and contingencies went up 74.8% to Rs126.36 crore from Rs72.29 crore in the same quarter a year ago. Photo: Abhijit Bhatlekar/Mint
Mumbai: Yes Bank Ltd on Wednesday said its net profit in the quarter ended March rose 28% to Rs.551 crore from Rs.430 crore in the same period last year, riding on robust demand for loans from small businesses and higher fee income.
The bank’s board has approved a move to seek shareholder and regulatory approval to raise up to $1 billion by selling shares in one or more tranches through “any appropriate mode as deemed suitable”.
Chief financial officer (CFO) Rajat Monga said the approval was only an enabling one and has to be ratified by the bank’s shareholders in the annual general meeting (AGM) in June.
“This is to prepare for the growth opportunities to be witnessed in the next few years. It may or may not be used, and if it is used, it will not be immediately but could be in the second half of this fiscal. This approval if ratified by shareholders will be valid for the next one year till the next AGM,” Monga said.
Yes Bank’s profit was slightly lower than the Rs.556 crore forecasted by 24 analysts polled by Bloomberg.
The bank’s net interest income (NII), the difference between interest earned on loans and that paid on deposits, increased 36% to Rs.977 crore from Rs.720 crore last year.
The demand for loans has been robust especially from small and medium enterprises (SMEs), which are classified under retail loans by the bank, said Monga.
Such loans increased to 35% of the bank’s loan book in March 2015 from 31% in December 2014 as loans to SMEs increased by 50% in the fiscal year ended March 2015, Monga said.
The net interest margin (NIM), the difference between the yield a bank earns by giving loans and that it pays on deposits, improved to 3.2% from 3% last year as the cost of funds fell more than the yield that the bank earned on advances during the quarter, Monga said.
Other income, or the money a bank earns through fees and commissions, rose 33% to Rs.590 crore from Rs.446 crore.
Monga said the share sale plan shows that the bank is more confident of growth in the future. “We are setting out on our vision for 2020 and are working on calibrating a 20-30% growth. The desire for us to become a large bank and increase our balance sheet to Rs.4.45 trillion by 2020 from about Rs.1.5 trillion now,” Monga said.
If the bank chooses to sell shares, it will be the second such sale in two years as it had raised $500 million by selling fresh shares to a clutch of institutional investors on 30 May 2014.
Provisions and contingencies went up 75% to Rs.126 crore from Rs.72 crore in the same quarter a year ago as the bank provided for restructured loans and also set more money aside as a countercyclical buffer for the future.
Net non-performing assets (NPAs), a measure of the bank’s loan book quality, stood at 0.12% against 0.05% a year ago, while gross NPAs were at 0.41% compared with 0.31%.
Though the bank did not sell any bad loans to asset reconstruction companies during the quarter, it restructured a single loan worth Rs.160 crore from a road project, which was delayed, Monga said.
Yes Bank shares gained 1.43% to close at Rs.795.75 per share on Wednesday on the BSE, while the Sensex gained 0.77% to close at 27,890.13 points. The banking index, Bankex, gained 0.78% to close at 20,959.73 points.
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