YES Bank Q4 profit jumps 34% on strong net interest income

YES Bank reported a 34 per cent increase in net profit to Rs 272 crore in the fourth quarter ended March 31, 2012, against Rs 203 crore in the corresponding year-ago period.

A robust 43 per cent growth in non-interest income at Rs 266 crore (Rs 187 crore in Q4 FY11) coupled with a 29 per cent increase in net interest income (NII) at Rs 448 crore (Rs 348.5 crore) boosted the bank's profit.

Net profit for the year ended March 31, 2012, also rose by 34 per cent to Rs 977 crore (Rs 727 crore). Net interest income grew 30 per cent at to Rs 1,616 crore (Rs 1,247 crore).

NII growth

The Managing Director and CEO, YES Bank, Mr Rana Kapoor, attributed the profitability to steady NII growth, and continued focus on revenue diversity — cross selling of financial products, financial advisory, transaction banking and retail banking fees — leading to strong non-interest income growth.

Savings accounts (SA) deposits increased by 206 per cent year-on-year and 108 per cent on a sequential basis.

CASA (Current and Savings Account deposits) ratio has improved by 2.4 per cent on a sequential basis. CAR (Capital Adequacy Ratio) was at 17.9 per cent with a Tier I ratio of 9.9 per cent as on March 31, 2012.

The advances grew by 10.5 per cent at Rs 37,989 crore (Rs 34,364 crore) as on March 31, 2012, while deposits growth slowed to 7 per cent at Rs 49,152 crore (Rs 45,939 crore).

The cost of funds rose to 9 per cent (8.8 per cent) in the year ended March 31, 2012.

YES Bank may raise $400-500 million at the end of the fiscal year, Mr Kapoor said.

The bank expects to increase its retail banking portfolio to 36 per cent of total advances by FY15 from 18 per cent in FY12, he added.

The shares of the bank ended higher by 1.86 per cent at Rs 366.40 per share on the Bombay Stock Exchange.

beena.parmar@thehindu.co.in

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Allahabad Bank to open four branches overseas

Allahabad bank has approached the Reserve Bank of India (RBI) for opening four overseas branches. At present, the bank has one overseas branch and representative office.

Mr J. P. Dua, Chairman and Managing Director, Allahabad Bank, said: “We have approached the regulator for opening overseas branch each in Dhakha, Shanghai, Singapore and Hong Kong. With this Hong Kong will have two branches.”

The bank has a representative office in China. The bank is celebrating 148 years of its existence.

The oldest joint stock bank of the country aims to maintain net interest margin of 3 per cent during current fiscal. The bank expects credit and deposits to growth at 20 per cent each in the current fiscal, Mr Dua added.

The bank has opened its 2,525th branch, which is in the Delhi region. It has also launched 148 ultra small branches which will work with one official and banking correspondents.

The bank also announced the launch of inter-bank mobile payment service, Rupay Card, prepaid card and other e-products.

Highlighting the bank's performance, Mr Dua said that the bank's business has crossed Rs 2,72,000 crore in 2011-12.

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Union Bank cuts base rate by 15 bps

Union Bank of India has reduced its base rate by 15 basis points from 10.65 per cent to 10.5 per cent, according to a release filed with the Bombay Stock Exchange.

The revised rate is effective May 1, 2012, the release said.

With this reduction, the base rate has been effectively brought down by 25 bps in two stages: 10 bps from December 26, 2011 and 15 bps from May 1, 2012.

Deposit rates

The bank has also realigned deposit rates across maturities. While in the longer end, the deposit rates have been brought down by 25 to 45 bps; at the shorter end, it has been realigned upwards by 15 to 25 bps.

This change will come into force from April 27, 2012.

In December 2011, Union Bank had reduced its base rate marginally by 10 bps to 10.65 per cent.

Review of BPLR

Union Bank would also take up the review of the BPLR (Benchmark Prime Lending Rate) shortly.

It has also proposed to review the spread over base rates for suitable reduction in certain specific segments like Agriculture, MSME and Retail, which would also be announced shortly

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Interest income boosts ING Vysya Bank net 39.5% in Q4

Higher net interest income boosted ING Vysya Bank's net profit by 39.5 per cent to Rs 127.4 crore during the fourth quarter of the last fiscal (2011-12).

The net interest income grew 19 per cent while operating profit rose 54 per cent during the quarter. “It's an all-round performance, and our core income has grown in line with the balance-sheet. We could hold our cost growth well, which is the primary driver of improvement in profitability,” said Mr Jayant Mehrotra, Chief Financial Officer, ING Vysya Bank.

The bank made higher provisioning this quarter at Rs 56.6 crore to take its provision-coverage ratio to 90.7 per cent. “We have set this aside for a rainy day and have made a very conservative approach,” he said.

Mr Mehrotra also pointed out that the effective rate of tax during the quarter was lower due to the bank claiming the deduction allowed on lending to infrastructure and other sectors under Section 36(1)(viii) of the Income-Tax Act, 1961.

This deduction has been claimed on a cumulative basis from the financial year ended March 2008, he said, adding that the bank used a large part of the tax benefit to enhance the provision coverage ratio.

Gross NPA ratio improved to 1.92 per cent (2.3 per cent) and net NPA ratio was at 0.18 per cent (0.39 per cent).

Full year show

For the year ended March 31, 2012, the bank's net profit grew 43.2 per cent to Rs 456.3 crore (Rs 318.7 crore), driven by a 20 per cent increase in net interest income to Rs 1,208.3 crore (Rs 1,006.5 crore).

anju@thehindu.co.in

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SBI rate cut may trigger war in car loan segment

The country's largest bank, State Bank of India, has slashed auto loan rates and deposit rates while many others including Kotak Mahindra Bank, Bank of Baroda and Deutsche Bank have cut their benchmark base rates.

SBI has reduced its auto loan rate by 75 basis points to 11.25%. The move will force other big lenders in the auto finance business like HDFC Bank and Kotak Mahindra Bank to cut rates. SBI's rate cut will enable borrowers save Rs 40 on every lakh. The equated monthly instalment on a Rs 1 lakh seven-year loan has come down from Rs 1,765 to Rs 1,725. Till now SBI had pegged its auto loans at its rack rate of 12%.

Lenders such as HDFC Bank, Axis Bank and Kotak Mahindra, who had higher rack rates, have been offering better deals through special rates starting around 11.5%."This is a highly interest sensitive market and we will have to review our rates to retain our market share," said an official with a leading private bank.

On Monday Kotak Mahindra Bank and Deutsche Bank brought down their base rates by 25bps and 50bps respectively. "We decided to pass on maximum benefit to our customers in keeping with the spirit of supporting economic revival and as signalled in the recent RBI policy," said Gunit Chadha, CEO, Deutsche Bank India. Meanwhile, Bank of Baroda has said that its base rate will come down by 25 basis points with effect from May 1, 2012 while deposit rates are also being reduced by 25 to 50 basis points across maturities.

The reduction in lending and deposit rates are a fallout of the Reserve Bank of India's decision to signal cheaper funds by reducing its repo rate by 50 basis points in its monetary policy on April 17. The repo rate is the rate at which RBI extends overnight funding to banks to meet their short-term cash requirements . According to rating agency Moody's , the move will improve credit-worthiness of Indian banks and reduce pressure on bad loans.

"The RBI's policy easing and greater access to liquidity are credit-positive because they support banks at a time of increasing asset quality and liquidity pressure," Moody's said. It added that in the short-term the easing will help banks steady borrowing rates and interest margins.

Source: EconomicTimes

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