YES Bank has reported a 28 per cent rise in net profit for the first quarter ended June 30, 2015 driven by strong net interest income and other income, despite a rise in provisions towards bad loans.

The mid-sized private sector lender’s net profit stood at Rs 551 crore compared with Rs 432 crore in the year-ago quarter.

Net interest income, the difference between interest earned on loans and paid on deposits, jumped 42 per cent to Rs 1,060 crore from Rs 745 crore in Q1FY15. Non interest income jumped 32 per cent to Rs 545 crore from Rs 414 crore.

Gross non-performing assets (NPAs) ratio, or bad loans as a percentage of total loans, increased to 0.46 per cent from 0.33 per cent a year ago, while net NPAs stood at 0.13 per cent from 0.07 per cent in the same period last year. Net NPA ratio was also up at 0.13 per cent (Rs 107 crore) against 0.07 per cent.

As on June 30, 2015, advances grew 35 per cent year-on-year to Rs 79,666 crore, while depsoits were up 25 per cent at Rs 95,316 crore.

Provisions, or the funds set aside to make up for losses, rose 313 per cent to Rs 98 crore from Rs 24 crore. Sequentially, however, it declined 22.5 per cent from Rs 126 crore in the March quarter.

During the quarter, net interest margin inched up to 3.3 per cent from 3.0 per cent earlier.

The bank expects 25-50 bps interest rate cut in key policy rates by RBI in this financial year.

At day’s close, YES Bank shares ended at Rs 815.70 per share, higher by 2.65 per cent over the previous close on the BSE.

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