Yes Bank Clocks Stellar Growth, Net Profit Zooms 31%
Yes Bank surprised the street with better-than-expected results that saw the stock surging a solid 6.4 percent immediately after the results were announced.
Yes Bank’s profitability zoomed 31 percent in the first quarter of FY18 to Rs 965 crore, while net non-performing assets reduced significantly to below 0.5 percent coming in at 0.39 percent in the first quarter.
The bank also announced a 5 for 1 stock-split, subject to approvals.
Yes Bank’s results were strong on all fronts. The bank posted a steady increase in net interest income which stood at Rs 1808.9 crore, driven by steady growth in advances, improvement in the CASA rations and expansion in net interest margins.
The results beat street estimates by far on all counts. On the non-performing front, the bank surprised positively with recoveries in gross non-performing assets. GNPAs dipped substantially to 0.97 percent in the June quarter 2017, down from 1.52 percent in March 2017. Net NPAs dipped from 0.81 percent in March 2017 to 0.39 percent on June 2017.
The bank said that 60 percent has been recovered from an extraordinary account that was classified as NPA in March 2017, and that more such recoveries are expected further. Yes Bank also said that there has no new restructuring of assets. Market watchers cheered the lower NPA numbers.
Yes Bank’s profitability improved substantially as net interest margins expanded marginally from 3.6 percent in Q4FY17 to 3.7 percent in Q1FY18 due to better scale and lower interest costs.
The bank’s return ratios have been encouraging with return on assets coming in at 1.8 percent and return on equity at a strong 17.4 percent in the first quarter.
On the CASA front, the bank has been able to garner more deposits. Yes Bank’s CASA ratio stood at 36.8 percent, surging 7.2 percent in a year on the back of strong growth in deposits. Both savings and current accounts deposits posted a growth of 45.8 and 66.6 percent yoy.
The bank has been also expanded its advances at a healthy clip at a time when the loans growth has been muted in the rest of the economy. Advances grew by 32.1 per cent to Rs 1.4 lakh crore with both corporate and retail businesses growing at a healthy clip. Core retail advances surged strongly by 166 percent yoy.
The bank is also comfortably placed on the capital requirements with capital adequacy at 17.6 percent. Yes Bank’s total capital funds stood at Rs 32,541 crore.
Analysts expect the positive momentum to continue in the coming quarters.
