Yes Bank Q2 Results: Net profit surges 145% year-on-year to ₹553 crore, with NII rising 14%

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 ($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, according to LSEG data.

Yes Bank’s loans grew 12.4 per cent on year, while deposits rose 18.3 per cent.

Net interest income, the difference between the interest earned on loans and paid to depositors, rose 14.3 per cent to ₹22 billion.

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 per cent, up from 2.30 per cent a year earlier and flat from the previous three months.

Provisions and contingencies, or funds kept aside for potential bad loans, fell nearly 41 per cent to ₹2.97 billion.

This was after the bank reversed provisions worth ₹1.03 million 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 per cent at end of September, 1.70 per cent from the end of the previous three months.

Shares of Yes Bank closed 2.6 per cent lower on Friday ahead of the results.