YES Bank net profit rises 56% on healthy credit growth

YES Bank's net profit increased 56 per cent to Rs 156 crore for the quarter ended June 30, 2010, from Rs 100 crore in the same quarter last year on robust credit growth.

Mr Rana Kapoor, Managing Director and CEO of the Mumbai-based private sector bank, said that the strong credit growth was due to loans to the telecom sector. Over 20 per cent of the total loans were to telecom companies.

The bank has headroom to raise Rs 2,000 crore Tier-II capital, most of which would be done this year. It may raise Rs 500 crore in the next quarter, through upper Tier-II and lower Tier-II bonds.

Other income was down 5 per cent to due to negligible trading gains compared to the same quarter last year. Provisions were considerably lower at Rs 12 crore (Rs 45 crore). Cost of funds was 6.3 per cent, down from 8.1 per cent last year. Total advances increased 107 per cent and total deposits increased 97 per cent.

The bank is in the next phase of growth and is therefore focusing on retail and SME initiatives, Mr Kapoor said.

Of the total advances, retail and SME advances account for 4.5 per cent. The target is to increase this to 9-10 per cent by the end of the fiscal.

The bank is targeting to increase the share of low-cost current and savings account from 10 per cent to 15 per cent by 2012 and 30 per cent by 2015.

“If we get to 30 per cent CASA, our NIM should be 4 per cent,” Mr Kapoor said.

The bank plans to open 100 branches across India. It has received 91 new branch licences. It is also looking to open an overseas branch in Bahrain and a rep office in the UAE in the next one year, Mr Kapoor said.