Yes Bank quarterly profit surges but misses estimates

Standalone net profit rose to ₹231 cr ($27.8 million) in the financial third quarter, the Mumbai-based private lender said on Saturday, up from ₹51 cr in the same period a year earlier.

Analysts on average had expected a net profit of ₹343 cr, according to LSEG data.

Yes Bank took a sharp hit on profits in the year-earlier quarter as it set aside more provisions on its balance sheet after transferring bad loans to private equity firm J.C. Flowers.

In the recent quarter, provisions and contingencies fell to ₹555 cr from 8.45 billion rupees a year earlier.

Net interest income, the difference between the interest earned on loans and that paid to depositors, rose 2.33% to ₹2017 cr.

The net interest margin, a key indicator of a bank's profitability, fell to 2.4% from 2.50% a year earlier, but was higher than the 2.30% reported in the previous three months.

Most Indian private lenders have tighter lending margins for the third quarter as deposits got repriced higher amid tightened banking system liquidity.

"We will see how we can grow our deposit base further to support a loan growth of 15% going forward," Chief Executive Prashant Kumar told a conference call.

Its gross non-performing asset ratio was at 2% at the end of December, unchanged from the end of the previous quarter.

Yes Bank expects bad loan recoveries worth ₹1500 cr this quarter, Kumar said. The bank's exposure to alternate investment funds stood at ₹125 cr, which was fully provisioned for, in line with the central bank's mandate, he said.

Shares of Yes Bank ended 0.8% higher on Thursday ahead of the results. Friday was a public holiday in India.