Yes Bank Q4 profit, NII beat estimates, margin expands but asset quality worsens

Yes Bank reported better-than-expected increase in March quarter net profit at Rs 914.1 crore, up 30.2 percent compared to the same period last year due to sharp rise in other income, net interest income & operating profit, but the growth was restricted by higher provisioning and deterioration in asset quality.

The private sector lender's net interest income stood at Rs 1,639.7 crore, a rise of 32.1 percent against Rs 1,241.4 crore reported during the same quarter last year. Meanwhile, the net interest margin increased to 3.6 percent against 3.5 percent during the previous quarter.

The bank's managing director and CEO, Rana Kapoor, attributed the increase in net interest income due to strong advances and CASA. He also highlighted that the NIM expanded to 3.6 percent for the first time.

Other income or non interest income of the bank shot up 56.6 percent year-on-year to Rs 1,257.4 crore and operating profit jumped 38 percent to Rs 1,691 crore in the quarter ended March 2017.

However, the bank's asset quality witnessed a deterioration as net non-performing assets (NPAs) grew substantially to Rs 1,072.3 crore against Rs 342.5 crore that it posted in the previous quarter. The spike in NPA was seen due to a slippage of one account of Rs 911 crore.

Gross NPAs more than doubled to Rs 2,018.5 crore compared to Rs 1,005.9 crore in the previous quarter.

The bank also witnessed sharp increase in its provisions that rose to Rs 309.7 crore against Rs 186.5 crore during the same quarter last year. In the December quarter, the company had posted provisions of Rs 115.4 crore.

According to a CNBC-TV18 poll, profit was seen at Rs 896.3 crore and net interest income at Rs 1,596.4 crore during the quarter.

Among key ratios, the lender's CASA ratio was reported at 36.3 percent, savings account growth at 60.06 percent, while advances were up 34.7 percent at Rs 1.32 lakh crore. A dividend of Rs 12 per share was also announced by the bank.