Says ‘Yes’ to Growth: Bank posts 52% rise in Q3 PAT

Yes Bank, India’s leading private sector bank, has said that its net profit during the third quarter of FY 2010-11 grew 51.6% to Rs. Rs 191 crore compared to Rs 126 crore, on year-on-year basis. The bank’s Net Interest Income (NII) rose 53.2% to Rs 323.2 crore against Rs 211 crore, during the same period. Further, its total advances surged 66.3% to Rs 31,112.2 crore during Q3FY11 from Rs 18,710.4 crore in Q3FY10, while total deposits grew by 79% to Rs 39,452.8 crore from Rs 22,038.6 crore, during the same period.

Its NIM (Net Interest Margin), however, was lower at 2.8%, as on December 31, 2010, vis-à-vis 3.0% in the preceding quarter ending September 30, 2010.

The bank’s capital adequacy ratio, a key metric for a bank, stood at 18.22%, as on December 31, 2010.

The bank's net NPAs as a proportion of net advances fell to 0.06% from 0.09%, during the comparative quarters.

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Further analysis shows that the bank’s growth during the third quarter of the current fiscal year slowed a bit as compared to its performance during the immediate preceding quarter i.e., Q2FY11 when its net profit recorded a jump of 58% while NII grew at a much higher rate of 78%.

             

Yes Bank’s Comparative Performances: Q3 vs. Q2, FY’11
Change, Y-o-Y	NII	NIM (%)	Total Advances	Total Deposits	CAR (%)	PAT
Q3 FY’11	53.2	2.8	66.3	79	NA	52
Q2 FY’11	77.9%	3.0	86.3	107	19.4	58
(All figures in % except NIM and CAR)

However, going ahead, analysts expect growth momentum to come down. “Surging interest rates may weigh on the growth momentum of India's top banks in 2011, after rising loan demand and fee income in Asia's third-largest economy likely boosted their profits in the final quarter of last year,” warns a report in Reuters. As the runaway inflation remains a key worry before RBI, India’s central bank, likelihood of a (interest) rate hikes looks very much possible, which could, however, pressure banks’ margin, it cautions.