MUMBAI: Private sector lender Yes Bank Saturday said its net income soared 123 percent on-year to Rs 452 crore on improving asset quality and steady margins coupled with a strong growth in non-interest income for the March quarter and the management expects to reclaim the high margin levels of the pre-crisis period of over 4 percent in the next two-three years.
In the year ago quarter the ban had earned Rs 202.4 crore and even sequentially too, the net jumped by 95.2 percent from the previous quarter.
The core profitability metric that is the net interest margin held steady at 2.4 percent, consistent with the previous quarter and the management led by the chief executive Prashant Kumar told reporters that the margins are low because of the shortfall in the bank’s priority sector lending book, forcing it to keep additional deposits to the tune of the shortfall in the Nabard-run rural infra development fund (RIFD) which as of end March stood at over Rs 14,000 crore.
“As we expand our foot print and asset allocation into the PSL complaint lending we hope to add 80-100 bps to our current NIM. And I hope this reaching in the next two to three years,” Kumar said.
The bank saw robust growth in non-interest income with a 56.3 percent rise for the quarter and 38.8 percent for the full year, the chief financial officer Niranjan Banodkarm said.
“We continue to witness strong momentum in our liability franchise with deposits expanding to over 20 percent for the first time in the past eight quarters. Also, despite the challenging environment during the course of the year, our Casa ratio has expanded 10 bps to 30.9," Kumar said.
Net interest income (NII) for the quarter rose 6.8 percent to Rs 2,153 crores while non-interest income surged 56.3 percent to Rs 1,569 crore, fueled by diverse and granular fee streams.
The asset quality improved notably, with gross non-performing asset (GNPA) ratio falling to 1.7 and the NNPA ratio falling to 0.6. The provision coverage ratio remained robust at 79.3.
Total assets grew 14.3 percent to Rs 405,493 crore, while deposits saw a 22.5 percent uptick to Rs 266,372 crore, and net advances rose 12.1 percent to Rs 227,799 crore.
Going forward, Kumar said he expects the bank to clock 18.5 percent growth in deposits and 17 percent growth advances this fiscal. This loan growth will be driven by micro, small and medium enterprises and mid-market segments. Large corporate loan book has also started growing, Kumar added.
During the quarter, Yes Bank started functioning as PSP Payment Bank to existing and new consumers of Paytm, which had been banned by the RBI to do any new business of acquiring customers from March 15.