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Lending to SMEs accelerates YES Bank's net profit up 19%
Lending to small and medium enterprises (SMEs) increased private sector lender YES Bank's net profit growth by 18.8% y-o-y to Rs 430.2 crore for the quarter ended March 31. On Wednesday for FY14, the bank posted a net profit of R1,617.8 crore, an increase of 24.4%. Net profit was boosted by a 12.8% y-o-y rise in net interest income (NII) to R719.6 crore.

As a consequence, YES Bank’s net interest margin (NIM) increased 10 basis points to 3% in Q4. The bank was looking to increase its NIM to about 3.15% in FY15. Non-interest income increased 17.4% y-o-y to Rs 445.5 crore and the bank’s operating profit was up 7.3% y-o-y to Rs 680.4 crore, chief financial officer, Rajat Monga stated, as reported by The Financial Express.

Asset quality of the bank increased marginally, and gross non-performing assets (NPAs) decreased from 0.39% of gross advances in Q3 to 0.31% of gross advances in Q4.

Net NPAs stood at 0.05% of net advances and there was no fresh restructuring of loans during the quarter and restructured advances stood at R100.9 crore or 0.18% of gross advances, the bank stated. The bank sold Rs 12 crore worth of bad loans in Q4 and made recoveries worth Rs 35 crore, Monga added.

In a post-results conference he stated that NPA position has improved compared to the December quarter. The economic environment continues to be challenging, but it is safe to say that the stress of asset quality has bottomed or peaked out.

While total advances were up 18.4% y-o-y at Rs 55,633 crore in Q4, large corporate lending accounted for 63.3% of the advances portfolio and mid-sized corporate lending accounted for 15.5% and branch banking, which includes retail and MSME lending, accounted for 21.2% of the advances.

Total deposits grew 10.8% y-o-y to R74,192 crore. Current and savings account (Casa) deposits grew 28.8% y-o-y to R16,344.7 crore, taking the Casa ratio to 22%.

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