MUMBAI (Reuters) – India’s Yes Bank reported a bigger-than-expected rise in net profit for the July-September quarter on Saturday, helped by an increase in core lending income and a drop in provisions.
The Mumbai-based private lender’s standalone net profit more than doubled to 5.53 billion rupees ($65.8 million) for the financial second quarter from 2.25 billion rupees in the same period a year earlier.
That exceeded analysts’ average forecast of 5.46 billion rupees, according to LSEG data.
Yes Bank’s loans grew 12.4% on year, while deposits rose 18.3%.
Net interest income, the difference between the interest earned on loans and paid to depositors, rose 14.3% to 22 billion rupees.
Indian banks have consistently seen healthy demand for loans as economic growth has been strong and urban consumption demand is high. Banks, however, are trying to raise deposits to fund the credit growth that has kept margins under pressure.
Yes Bank’s net interest margin, a key profitability measure, was 2.4%, up from 2.30% a year earlier and flat from the previous three months.
Provisions and contingencies, or funds kept aside for potential bad loans, fell nearly 41% to 2.97 billion rupees.
This was after the bank reversed provisions worth 1.03 million rupees previously kept aside for its exposure to Alternative Investment Funds, it said.
Yes Bank’s gross non-performing asset ratio, a key gauge of asset quality, improved to 1.6% at end of September, 1.70% from the end of the previous three months.
Shares of Yes Bank closed 2.6% lower on Friday ahead of the results.
($1 = 84.0950 Indian rupees)
(Reporting by Siddhi Nayak; Editing by William Mallard)
