Yes Bank fourth-quarter profit rises 29 percent

Yes Bank fourth-quarter profit rises 29 percent

Yes Bank, one of the leading private sector bank, today reported a 29.02% jump in net profit at Rs 11.79 billion for the third quarter ended March 31, 2018 from Rs 9.14 billion in the same period a year ago.

Net profit rose to 11.79 billion rupees ($176.50 million) in the quarter ended March 31, from 9.14 billion rupees a year earlier, the Mumbai-based bank said in a statement (https://www.bseindia.com/xml-data/corpfiling/AttachLive/20a2fbe3-9057-48f2-a8fb-6c71d0e8cc20.pdf) on Thursday. Net profit for the financial year 2017-18 shrunk 93 per cent year-on-year (YoY) to end at Rs 276 crore.

In absolute terms, gross NPAs stood at Rs 2,626.80 crore by end of March 2018 as against Rs 2,016.80 crore by the end of the preceding year.

Investors lapped up the yes Bank counter with the scrip rallying 8.26 per cent to Rs 352.05 on the BSE as against gains of 0.62 per cent on the benchmark.

The bank had logged a net profit of Rs 914.12 crore during January-March of 2016-17. As on March 31, 2018, the bank's GNPA was Rs 34,249 crore and net NPA was Rs 16,592 crore. The net interest margin - a gauge of profitability - stood at 3.4 per cent in March quarter, down from 3.6 per cent in the year-ago period. In Q4FY17 NII was at Rs 4,728.60 crore. Net NPA for the quarter came in at 0.64 percent compared with 0.93 percent in the December quarter.

"The financial results this quarter are a reflection of the bank's desire to accelerate non-performing asset recognition, and get past the asset quality issues as soon as possible". Sharma is set to demit office in December this year. "Credit risk area was a disappointment for the bank. The capital position allows us to participate in the growth cycle", Sharma said.

Reports suggest that the Reserve Bank of India had intervened in the Board's decision that cleared Sharma's reappointment for the fourth term for another three years in July last year.

Jairam Sridharan, CFO of Axis Bank said, NPA recognition cycle is almost through with this quarter.

Speaking about how FY19 will play out, Sridharan said, "The new NPA formation will reduce significantly".

Given that about 90 per cent of slippages (on an average) in the past several quarters have come from BB & below rated book, the significant shrinkage in this book is a positive.

Sridharan said the impact of the Insolvency and Bankruptcy Code (IBC), write backs from the resolution, change in credit culture due to the February 12 RBI circular, among other initiatives will help improve the credit costs going forward.

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