Yes Bank Q3 PAT up 34% Y-o-Y

MUMBAI: Yes Bank continued with its steady performance posting a 34% year-on-year growth in its net profit. The stable financial performance was on account strong net interest income, robust loan growth, healthy margins and strong asset quality.

In line with the previous quarter, savings account continued to grow at a faster pace of over 300%( owing to a low base) increasing the CASA ratio from 17% to 18.3%. Increase in the low cost CASA base along with decline in wholesales rates improved the margins for the bank.

Net interest income-difference between interest earned and interest paid increased by 36% year-on-year just like the last quarter. This was on account of a 22.3% growth in loan book and improved margins of 3%.

Other income also showed a spectacular rise of 48% year-on-year. The biggest contributor to this income stream was Financial Advisory which showed a growth of 101%.Apart from this strong growth in retail banking fees and transaction banking also propped up other income.

The bank's focus on giving working capital loans to corporates reflected in its robust asset quality. The bad loans to total loans (gross) came down 26% quarter-on-quarter to 0.17%.However, there was a jump of 154% in its provisioning cost which brought down its net profit.

At Rs 532, Yes Bank is trading at a price-to-book value of 3.30 compared to a value of 3.09 for IndusInd Bank, its closest peer. At the current price, all the positives seem to have been factored in and any upside from here is most likely limited.