MUMBAI, April 19 (Reuters) – India’s Yes Bank reported a better-than-expected 63% rise in net profit for the January-March quarter on Saturday, helped by falling loan-loss provisions.
The Mumbai-based private lender’s standalone net profit rose to 7.38 billion rupees ($86.39 million) for the financial year fourth quarter from 4.52 billion rupees in the same period a year earlier.
That was above analysts’ average forecast of 6.4 billion rupees, according to LSEG data.
Yes Bank’s provisions and contingencies, or funds kept aside for potential bad loans, fell 32.5% on-year to 3.18 billion rupees.
Its gross non-performing asset ratio, a key gauge of asset quality, was at 1.60% at end of March, unchanged from the end of the previous three months.
Net interest income, the difference between the interest earned on loans and paid to depositors, rose 5.7% to 22.76 billion rupees.
Its other income, including fees, commissions, and interest earned from traditional interest-based activities, rose 11% to 15.67 billion rupees.
Its loans grew 8.1% on year, while deposits rose 6.8%.
Net interest margin, a key profitability measure, was 2.50%, up from 2.40% a year earlier and in the previous three months.
Analysts expect banks’ net interest margins to be under pressure in the coming quarters following the 50-basis-point rate cut by the Reserve Bank of India since February. That is because the pass-through to loan rates happens faster compared to deposits.
Shares of Yes Bank closed 1.2% higher on Thursday ahead of the results. ($1 = 85.4290 Indian rupees)