Yes Bank Q3 net rises 51.6 pct; beats f'cast

Private-sector lender Yes Bank posted a 51.6 percent rise in quarterly net profit in Oct-Dec, as both advances and deposits rose.

Net profit for the quarter rose to 1.91 billion rupees from 1.26 billion rupees a year ago, just ahead of a Reuters estimate of 1.8 billion rupees. Its quarterly net interest income jumped 53.2 percent on year to 3.23 billion rupees. Its net interest margin came in at 2.8 percent.

Total advances grew by 66.3 percent to 311.12 billion rupees as at Dec 31, while deposits increased by 79 percent to 394.5 billion rupees, it said.

Advances to 2G telecom service providers stood at 7.6 percent of total advances. Advances to micro finance institutions were at 0.94 percent of total advances, it said.

The bank's net non performing advances as a proportion of net advances as of Dec 31 dipped to 0.06 percent from 0.09 percent.

Indian mid-cap banks are likely to report another strong quarter of healthy profits in Oct-Dec on robust loan growth, better margin and abating concerns over asset quality, following a strong economic revival.

Demand for loans in Asia's third-largest economy, which the International Monetary Fund has forecast would expand 9.7 percent in 2010, is expected to remain strong in the coming quarters.

Bank credit in India increased 24.4 percent on year as of Dec. 31, according to the central bank's data. Deposits were up 16.5 percent from a year earlier.

CONCERNS/RISKS

However, slower deposit growth in a rising interest rate environment was a concern, analysts said. Besides, rising inflation and concerns of further rate hikes by the central bank could pressure its margins.

The wholesale price index (WPI) , the main inflation gauge, rose an annual 8.43 percent in December compared with an expected 8.35 percent rise in a Reuters poll and above 7.48 percent in November.

The annual industrial output in November grew at its slowest in 18 months at 2.7 percent, way below the 11.3 percent annual growth in the previous month and under the median forecast of 6.6 percent in a Reuters poll.

Shares in Yes Bank fell more than a tenth in the Oct-Dec quarter compared to a 4.6 percent fall in BSE Bank

At 1:28 p.m., its shares were up 0.83 percent at 272.1 rupees in a weak Mumbai market.