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Wednesday, October 24, 2012

YES Bank Q2 net up 30% on higher income

YES Bank reported a 30 per cent increase in net profit at Rs 306 crore for the second quarter ended September 30.

The private sector lender had recorded a net profit of Rs 235 crore in the year ago period.

Net interest income (the difference between interest earned and expended) increased 36 per cent to Rs 524 crore (Rs 386 crore).

Other income grew 29 per cent to Rs 277 crore (Rs 214 crore) on the back of financial advisory, transaction banking, and retail banking fees.

The bank’s gross non-performing assets (NPAs) during the quarter declined to 0.24 per cent from 0.28 per cent in second quarter of FY12.

The bank’s incremental provisions during the quarter stood at Rs 51 crore of which Rs 45 crore have been provided for a big account in the last two months. Rana Kapoor, CMD and CEO, said, “Of the total debt of that (big) account, 80 per cent of the unsecured loans have been provided for in this quarter. We have been proactive in biting the bullet as far as its maximum impact is concerned…risks are expected.”

He also mentioned that the account “could turn into a non-performing asset” in the next quarter of the fiscal year.

The bank has already exited the corporate debt restructuring (CDR) mechanism and “prefers to have bilateral transactions with the clients opting for restructuring”.

With no restructuring during the quarter, the bank’s restructured accounts portfolio stood at Rs 192 crore (0.46 per cent of total loans).

The CASA (current and savings account) ratio of the bank jumped 87 per cent to 17.3 per cent as on September 30 compared with 11 per cent in the year ago period. The capital adequacy ratio increased to 17.5 per cent compared with 16.5 per cent in the preceding quarter.

Year-on-year, total advances grew 23 per cent to Rs 42,019 crore, while the deposits grew 19 per cent to Rs 52,291 crore.

On Tuesday, shares of YES Bank ended up 3.18 per cent at Rs 399.35 on the Bombay Stock Exchange.

Nod for MF business

YES Bank will enter the mutual fund business in the next one year. The foray into mutual fund business, which was approved by the board today, will augment the bank’s retail offering, said Kapoor.

The bank will approach the Securities Exchange Board of India and the Reserve Bank of India (RBI) for permission to start the mutual fund.

Last month, the bank had received a retail equity broking licence from the RBI. It expects to launch this business next year.


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