CHENNAI 10 BusinessLine BANKING FRIDAY • JANUARY 20 • 2017

QUICKLY net net rises 31% in Q3 Aided by improved Advances increased 39 per cent y-o-y to ₹1,17,087 crore as at slumps 73% in Q3 net interest margins, December-end 2016 from says MD Rana Kapoor ₹84,396 crore as at December- Bad loan provisioning end 2015. OUR BUREAU Deposits were up 30.5 per cent rises, net interest , January 19 to ₹1,32,376 crore (₹1,01,437 crore margin declines YES Bank has reported a 31 per as at December-end 2015). The cent increase in net profit to low-cost CASA (current account Paying up JPMorgan Chase announced an OUR BUREAU ₹883 crore in the third quarter and savings account) deposits agreement to settle a federal lawsuit that Mumbai, January 19 ended December 30, 2016, from increased to 33.3 per cent from accuses the bank of discriminating against Axis Bank’s net profit in the third ₹676 crore in the year-ago 26.6 per cent. minority borrowers by charging them $1,000 quarter of FY17 decreased 73 per period. crore). Gross non-performing assets more than equally qualified white customers. cent year-on year (y-o-y) to ₹580 In the reporting quarter, net Rana Kapoor, Managing Dir- as a proportion of gross ad- The lawsuit was settled for $55 million AFP crore on higher provisioning for interest income (the difference Rana Kapoor, MD & CEO, YES Bank ector & CEO, YES Bank, said vances edged up to 0.85 per cent bad loans. between interest earned and in- growth and profitability were from 0.66 per cent in the year- However, the bank’s loan book cost deposits or CASA (current terest expended) was up 30.3 per ing commission, exchange and driven by expansion in net in- ago quarter. Rupee down 5 paise to 68.13/$ and net interest income expan- and savings account) consti- cent year-on-year (y-o-y) to brokerage, profit from sale of in- terest margins to 3.5 per cent YES Bank shares closed at Mumbai, January 19 ded by 10 per cent and 4 per cent, tuted 48 per cent. ₹1,507.50 crore (₹1,157 crore in vestments, and other non-in- (from 3.4 per cent in the year-ago ₹1,347.15 apiece, up 0.06 per cent The rupee weakened further by five paise to respectively, the year-ago quarter). terest income, increased 34 per quarter), while maintaining over the previous close on the close at a one-week low of 68.13 against a Net interest income (NII) grew Bad loans Non-interest income, compris- cent y-o-y to ₹998 crore (₹746 healthy asset quality. BSE. resurgent dollar amid hawkish tone from the 4 per cent y-o-y to ₹4,334 crore in Gross non-performing assets US Federal Reserve. High volatility continued to Q3 FY17 (₹4,162 crore in Q3 FY16). (NPA) rose 354 basis points (bps) churn the market for the second day as The bank’s net interest margin y-o-y to 5.22 per cent while net investors waited for more clarity in an (NIM ) declined 36 basis points to NPAs rose 143 bps to 2.18 per cent. uncertain global scenario in the midst of 3.43 per cent (3.79 per cent in Q3 The bank’s capital adequacy confusing signals from the world’s major FY16). ratio (money set aside to absorb Continuing the steady run central banks. Consistent demand for the shocks from bad loans) as per dollar from importers weighed on the rupee. Balance sheet Basel-III norms stood at 16.03 per ments continues to be on a WX The bank has been able to However, better capital inflows and firm local The bank’s balance sheet size cent, up 213 bps y-o-y. Q3 COMMENT strong footing. Strong loan growth, grow its CASA deposits at over 40 equities helped the home currency regain (total assets) grew 15 per cent y- Axis Bank has a network of The new marginal cost of healthy profitability and per cent annually over the last some lost ground, a forex dealer said. PTI o-y to over ₹5.78 lakh crore. The 3,211 branches and 13,726 ATMs RADHIKA MERWIN funds-based lending rate (MCLR) stable asset quality, just five years. loan book grew 10 per cent to across the country. BL Research Bureau framework, introduced by the about sums up the bank’s In the December quarter, ₹3,47,175 crore. Of this, retail con- Despite challenges within the RBI last year, has helped the bank performance in the latest aided by the influx of deposits Bond yields, call rate rise tributed 43 per cent, corporate Nine-month performance sector, particularly post-demon- offer competitive rates and tap December quarter post-demonetisation, the bank Mumbai, January 19 44 per cent, and small and me- For the nine months ended etisation, YES Bank continued to into opportunities in the large grew its CASA by a robust 63 per Government bonds (G-Secs) continued to dium enterprises (SME) and oth- December 2016, Axis Bank’s net deliver steady performance corporate segment. The corpor- cent year-on-year. decline on selling pressure from banks and ers contributed the remaining 13 profit fell 73 per cent to ₹2,454 across parameters. ate book contributes the chunk In any case, YES Bank’s strong The net interest margin hence, corporates. The 7.61 per cent 10-year per cent. crore. NII for the period however, Strong loan growth, healthy — 68.9 per cent of total loans. return on equity (ROE) will con- improved to 3.5 per cent in the benchmark bond maturing in 2030 eased to Deposits grew 9.5 per cent to increased 9 per cent y-o-y to profitability and stable asset tinue to keep its growth in good December quarter, from 3.4 per ₹107.14 from ₹107.40, while its yield rose to over ₹3.7 lakh crore. Of this, low- ₹13,365 crore (₹12,280 crore). quality, just about sums up the Capital for growth stead. cent in the previous quarter. 6.79 per cent from 6.76 per cent. The overnight bank’s performance in the latest YES Bank’s robust growth had led The bank’s ROE, which has call money rate turned higher following strong December quarter. to concerns about the bank’s been in the 18-25 per cent range Asset quality demand from borrowing banks amid tight YES Bank has been delivering ability to raise the requisite cap- in the last couple of years, has Despite its higher corporate ex- liquidity in the system. It finished at 6 per cent year-on-year growth of 20-25 per ital to continue funding its kept the growth in capital intact posure and stellar growth in from Wednesday’s level of 5.80 per cent. PTI profit up 26% cent in loans for many quarters. growth in the coming quarters. through internal accretion. In loans, YES Bank’s asset quality The December quarter has not But the bank has raised ₹3,000 the December quarter, the ROE continues to be stable. In the SIB appoints additional director OUR BUREAU seen much deviation from the crore through Additional Tier-I stood at 22.3 per cent. December quarter, the bank’s Kochi, January 19 past trend; the loan growth has bonds during the December gross non-performing assets Kochi, January 19 Federal Bank has posted a 26 per only been stronger at 38.7 per quarter. Low-cost deposits stood at 0.85 per cent of loans, South has announced the cent growth in its net profit at cent, much higher than the This should help fund the Aside from the strong growth in lower than that of most private appointment of Achal Kumar Gupta as the new ₹205.65 crore in Q3 of FY17 com- muted 5 per cent growth at the bank’s growth for the next 12-18 loans, improving low-cost cur- banks. additional director. Gupta has over 40 years of pared with ₹162.72 crore in the system level as of December. months. The Tier-I capital stood rent account savings account Over the past five years, the experience in banking and finance, including corresponding period of the pre- The growth in the bank’s large at 12.2 per cent as of the Decem- (CASA) ratio continues to aid bank’s GNPA has been below 1 corporate credit and treasury management. vious fiscal. corporate, retail and SME seg- ber quarter. margin expansion. per cent of loans. The major posts held by him include Chief Operating profit increased General Manager (Corporate Accounts Group) 45.91 per cent to ₹474.90 crore of SBI, Managing Director of SBI Mutual Fund, from ₹325.48 crore in the year- Managing Director of and ago period. Whole-time Director of IFCI. OUR BUREAU As on December 31, total busi- centage of total deposits, in- ness increased 27 per cent year- creased to 34.66 per cent from profit jumps 70% Lloyd’s to open branch in on-year (y-o-y) to ₹1,61,864.87 32.10 per cent at the end of the Mumbai, January 19 crore. Total deposits registered a corresponding period last year. Driven by lower cost of funds, stable net to tighten the systems and pro- advances increased to 2.78 per Lloyd’s, the specialist insurance and yearly growth of 23 per cent to The book value per share in- cesses,” said Parthasarathi cent from 2.70 per cent in the reinsurance market, has announced plans to ₹92,235.65 crore, and net ad- creased to ₹49.94 from ₹47.86. interest income, and recoveries Mukherjee, Managing Director preceding quarter and 1.80 per open a reinsurance branch in India. This is vances rose 32 per cent to The bank earned a net interest and CEO of LVB. cent from Q3 of the previous being done in time for major reinsurance ₹69,629.22 crore. income of ₹791.39 crore for the OUR BUREAU crore in the year-ago period). The bank also had to pay a pen- fiscal. renewals that are likely in April, following final The bank’s NRE and low-cost quarter while the net interest Chennai, January 19 Other income more than alty levied by the RBI for the Net NPAs rose to 1.82 per cent approval from the Insurance Regulatory current account and savings ac- margin stood at 3.32 per cent. Amid demonetisation blues, Lak- doubled to ₹150.22 crore (₹69.32 lapse. Provisions for the same from 1.87 per cent on sequential Development Authority of India. OUR BUREAU count (CASA) deposits continued The gross and net non-per- shmi Vilas Bank (LVB) has repor- crore). were also made. basis and 0.80 per cent in a year- to witness consistent growth. forming assets (NPAs) at the end ted a healthy growth in profit Total income grew 22 per cent During the third quarter, ago quarter. NRE deposits grew 21.72 per cent of the quarter stood at ₹1,951.55 and strong recoveries in the to ₹879.26 crore (₹723.05 crore a there was some stress on asset During the end of the Decem- Bombay Mercantile Co-op Bank fined to ₹34,546.66 crore and CASA de- crore and ₹1,102.37 crore, respect- third quarter of this fiscal. year ago). quality. The bank saw fresh slip- ber quarter, the old private sec- Mumbai, January 19 posits rose 33.19 per cent to ively. Gross NPA as a percentage For the quarter ended Decem- “During the September pages of ₹88 crore. But recover- tor bank raised ₹168 crore in The Reserve Bank said it has imposed a penalty ₹31,972.97 crore. CASA, as a per- of total advances fell to 2.77 per ber 31, 2016, the bank’s net profit quarter, the bank reported a bill ies were to the extent of ₹81 equity through qualified institu- of ₹75 lakh on Bombay Mercantile Co- cent and net NPA as a percentage grew 70 per cent to ₹78.38 crore discounting fraud for a value of crore. There was only one major tional placement (QIP). operative Bank for violation of norms related WX of net advances stood at 1.58 per from ₹46 crore in the year-ago ₹75 crore in one of the branches. account in the shipping sector “This is the first time LVB ac- to KYC and anti-money laundering. In a The bank’s NRE and cent. quarter, supported by lower cost However, I am delighted to in- that turned bad and the value cessed the market to raise funds. statement, the said that the low-cost CASA deposits The capital adequacy ratio, of funds, stable net interest in- form that the entire amount, was ₹45 crore. The next big slip- Also, it was raised at the peak of monetary penalty has been imposed for continued to witness computed according to Basel-III come, and recoveries. along with the overdue interest, page was below ₹3 crore. demonetisation when condi- “violations of Know Your Customer/Anti-Money consistent growth guidelines, stood at 12.28 per Operating profit rose 62 per was recovered. Following this, Gross non-performing assets tions were not stable,” said Laundering directives issued by the RBI”. PTI cent at the end of the quarter. cent to ₹171.45 crore (₹105.99 numerous steps have been taken (NPA) as a percentage of gross Mukherjee.

Ujjivan Financial’s NPCI asks ICICI Bank to ‘We have tried to reduce our dependence profit down 11.85% accept UPI transactions OUR BUREAU Bengaluru, January 19 on project advisory, structured finance’ Increased provisioning made via PhonePe app arising out of lower collection Focus will be more finance segments. Excerpts What’s your view on the small extent, though there has RCom-Aircel, Reliance Infra- post-demonetisation has im- OUR BUREAU state that ICICI Bank has been from an interview: business outlook for this not been additional manufac- Adani Transmission and Reli- pacted the profits of Ujjivan New Delhi, January 19 advised to open UPI transac- on M&A, capital year (2016-17)? turing lines. Auto-ancillary ance Cement-Birla deals. In Financial Services. The National Payments Cor- tions immediately,” NPCI said markets, says Will there be an The growth in capital goods has started picking up as well. the project advisory and struc- The company, on stan- poration of India (NPCI) has in a statement. improvement in corporate sector has been affected be- Oil and exploration has been tured financing segment, dalone basis, saw its profit de- advised ICICI Bank to immedi- Raising security-related SBI Caps MD and bank results this cause of overcapacity and fall good. Telecom, after the ad- which contributes 80 per cent cline 11.85 per cent to ₹42.81 ately start accepting UPI concerns about access to UPI quarter? in demand, and the global vent of Jio, has become com- of our income, we are getting crore in the third quarter (Q3) transactions made through data to a non-banking applic- NS VAGEESH The results in the banking sec- slowdown. We have not seen petitive and will see consolida- a lot of mandates in the of this fiscal (FY17) from PhonePe, a Flipkart app. ation, ICICI Bank had on Janu- tor may still not recover to the major investments happening tion. Mining did well this fiscal stressed assets, S4A and SDR ₹48.57 crore in the same This follows a discussion ary 13 decided to block all its Varsha Purandare, MD & CEO of expected extent because pro- this fiscal. The earlier capacit- compared to last year. segments. period last year. that NPCI had with ICICI Bank customers from using the SBI Capital Markets, has been a visions may not go down ies have not been fully utilised As far as capital market Total income in Q3 rose and YES Bank — the banker to PhonePe mobile app and di- career SBI officer. Her three- much. It will not dip as of today; so, credit Will this translate into a activity is concerned (rights is- 36.63 per cent to ₹362.17 crore PhonePe — to review ICICI gital payment services. decade stint with the bank has because there may growth to the capital good fiscal for SBI Caps? sue/IPO/OFS as well as debt (₹265.07 crore in the year-ago Bank’s action to block UPI This was decided without exposed her to all facets and actually be some goods sector has This fiscal may not be that capital market), there has period). EPS (basic) stood at transactions made through any prior notice to YES Bank, wings of the bank — retail, growth or be at the been affected. It may good. Last year we did de- been substantial growth. ₹3.61 (₹4.47). PhonePe. “Based on a review which is Flipkart’s UPI bank- treasury and corporate credit. same rate because of O start increasing from cently well. We achieved our We have tried to reduce our The company’s net interest by NPCI....we would like to ing partner. Each stint, she says, has helped the ageing of these the first or second targets. There are two things dependence on project advis- income (NII) rose 43.92 per her acquire a certain attribute debts. quarter of next year. that determine how we do. ory/structured finance by fo- cent to ₹199 crore. Net in- which comes useful in her Provisions tend to go up as One is M&A activity, which saw cussing more on M&A, and terest margin (NIM) increased current role. For instance, her debt remains on the books for Which sectors are a big push this fiscal. And this capital markets. In raising to 13.22 per cent from 12.83 per stint as a treasury dealer, both longer periods. Also, due to witnessing credit doesn’t happen just funds through debt capital cent in Q3 FY16. . Bank deposits up 0.64% over in India and overseas, has given the demonetisation effect, grown? in one or two markets,we are ranked third. Commenting on the com- her the capacity to think on her some of the small and me- The hybrid annuity months. The We are trying to de-risk our pany’s performance, Samit feet and to adapt to changing dium enterprises (SMEs) may model in road pro- work starts revenue growth. Ghosh, Chief Executive Officer fortnight ended January 6 conditions quickly as the have some impairment be- jects has started a year or 18 and Managing Director, PRESS TRUST OF INDIA had fallen since the govern- market changes direction. “We cause of the liquidity strain. picking up as has months be- What’s your outlook for the Ujjivan Financial Services, Mumbai, January 19 ment announced demonet- cannot be rigid in our theories if We will have to watch out for solar power fore. We next fiscal? said: “Despite the challenging After falling in the previous isation of old ₹500 and the market doesn’t agree with this. where a lot of have seen The next fiscal should be bet- environment we have been fortnight, bank deposits ₹1,000 notes on November 8. our hypothesis. You’ll have to It will be visible only in this new projects are growth in ter. Some of our initiatives will able to maintain overall satis- again jumped 0.64 per cent in During the fortnight end- cut your losses quickly,” she quarter. I am confident that it coming up. Con- this activity. come to fruition next year. factory performance. Our the fortnight to January 6, ac- ing November 25, deposits at said. Her stint in credit (her will not be a serious con- sumer industries M&A activ- Capital markets, as of today, monthly collection efficiency cording to Reserve Bank of In- banks had soared to previous posting was as Chief straint. But provisions for to a ity grew six-fold are seeing a lot of issues com- for November and December dia data. ₹10,517,719 crore from Credit and Risk Officer of SBI) NPAs (non-performing assets) this fiscal. ing up. The pipeline looks was around 90 per cent. How- Bank deposits increased to ₹10,114,803 crore on Novem- has given her a rounded view of may not come down We did healthy. But remember also ever, customers impacted by ₹10,584,171 crore in the fort- ber 11. the Indian corporate sector and drastically. the that if I file a DRH (Draft Red demonetisation are continu- night to January 6 from Bank credit in the fortnight also a keen understanding of Herring) prospectus today, I ing to repay with a time lag. ₹10,516,237 crore collected to January 6 stood at the challenges faced by a public ZY have one year to raise money. Consequently, as of date, the during the fortnight ended ₹74,13,415 crore, up 0.9 per sector banker in providing This fiscal may not When the money will be collections of November and December 23, the RBI said on cent compared to ₹73,48,054 credit and then handling the be that good. Last raised depends on the right December dues stand at 95.4 Thursday. crore in the fortnight ended fallout if the loans don’t come year we did decently price and how the market per cent and 91.1 per cent, Deposits collected in the December 23. back in time. At present, her well. We achieved conditions are. respectively.” fortnight to December 23 had In the fortnight to Decem- focus has been on developing our targets. Many companies in the On the upcoming bank declined 0.7 per cent com- ber 23, bank credit as a whole new lines of business at SBI Caps Varsha Purandare mid-corporate category launch, Ghosh added, “We in- pared to ₹10,591,313 crore ac- grew a marginal 0.12 per cent to help de-risk its income MD & CEO, SBI came to raise money tend to launch Ujjivan Small crued during the fortnight from ₹73,39,116 crore in the stream from reliance on the Capital Markets this fiscal. That Finance Bank in the first week ended December 9. This was fortnight ended December 9, project advisory and structured YZ pipeline is good. of February in Bengaluru...” the first time that deposits RBI data showed.

CM YK ...... CH-X