YES Bank Q1FY15 Profit Grew By 9.6% Y-o-Y

The private sector Yes Bank posted its quarterly result for the first quarter of FY15 today. However, it failed to meet the street estimates and profit increased by 9.6% on yearly basis to Rs 439.48 crore, whereas the street was expecting the bank to post profit of around Rs 460 crore. The bank posted disappointing numbers due to subdued growth in net interest income (NII), fall in other income and increase in operating expenses.

The net interest income (NII) of the bank increased 13% on a yearly basis and stood at Rs 754.34 crore at the end of Q1FY15. The net interest margin of the bank stood at 3% for Q1FY15 and is up by 10 basis points sequentially. Other income, which forms around 14% of the total income, fell by 4% on yearly basis to Rs 425.61 crore for the quarter ended June 2015. The fall in other income was due to a drop in the trading income. The bank's operating expenses has increased 25% on yearly basis, primarily due to 37% increase in other expenses. Owing to all these factors operating profit of the bank has dropped by 5% on yearly basis to Rs 644.23 crore. However, substantial fall of 76% in the provisions and contingencies helped bank to post increase in net profit.

Nonetheless, asset quality of the bank has deteriorated in the quarter on sequential basis. Gross NPA and net NPA have on absolute basis increased by 13% and 64% on sequential basis to Rs 197.96 crore and Rs 42.81 crore, respectively. As proportion to gross advances and net advances, gross NPA ratio and net NPA ratio of the bank has increased by 2 basis points to 0.33% and 0.07% respectively.

Post these numbers, shares of the bank dropped by 2 per cent and closed at Rs 536.65, which discounts its book value by three times.