NPA troubles continue for Yes Bank; June net down 92 pc

Mumbai: Private lender Yes Bank's June quarter net plummeted 92.44 per cent to Rs 95.56 crore on a consolidated basis due to a Rs 6,232 crore addition to non- performing assets, which resulted the provisions to zoom.

This is the second consecutive quarter the bank has shown a massive hit on the bottomline since the new management under Ravneet Gill took over in March after the forced exit of promoter-chief executive Rana Kapoor over governance concerns by the Reserve Bank of India (RBI).

The bank's fresh slippages at Rs 6,232 crore nearly doubled if compared to the Rs 3,408 crore in the previous quarter, leading the gross non performing assets ratio to rise to 5.01 per cent against 1.31 per cent in the year-ago period and 2.91 per cent three months ago.

The overall provisions galloped 184 per cent to Rs 1,784 crore. It used Rs 1,399 crore of the Rs 2,100 crore in additional provisions made during the March quarter. Downgrade of two finance companies led to a Rs 1,109 crore hit in provisions during the reporting quarter.

The provision coverage ratio dropped to 43 per cent, one of the lowest among private sector lenders.

Despite the setbacks, Yes Bank, however, maintained its credit cost guidance at 1.25 per cent for the entire year, stating that the same stood at 0.32 per cent for the first quarter.

At the time of announcing results last time, the bank had said it has identified assets of over Rs 10,000 crore which led it to provide extra Rs 2,100 crore and report a maiden quarterly loss.

Later, reports had also come about watchers expressing concern over its exposure to companies like DHFL, the Anil Ambani Group companies and also the realty sector.

It sold one account with an exposure of Rs 412 crore to an asset reconstruction company (ARC) during the reporting quarter.

"This was a 'quarter of consolidation' in which the bank has demonstrated strong resilience in revenues and asset quality. We believe that earnings trajectory should strengthen significantly from hereon," the statement said in a "management commentary" on the numbers.

Its core net interest income grew by a tepid 2.8 per cent to Rs 2,281 crore after absorbing losses of Rs 223 crore on NPAs during the quarter.

The loan assets grew by a slower than the system 10 per cent, while the net interest margin slipped to 2.8 per cent primarily on a surge in NPAs.

Retail loans grew 43.3 per cent and now account for 18.3 per cent of the overall loans as against 14 per cent in the year-ago period.

The corporate banking assets slipped 4.6 per cent during the last three months, and grew 4.2 per cent as compared to the year ago period, and now form 63.9 per cent of the overall advances.

The bank's overall capital adequacy slipped to 15.7 per cent, while the core tier-I stood at 10.7 per cent, which points towards the need to utilise the enabling provision to raise equity sooner.

The bank scrip, which has been on a slide ever since Kapoor's termination, slipped 5.25 per cent to Rs 98.45 on the BSE, as against gains of 0.22 per cent on the benchmark. The results were announced after close of markets.