Mumbai: Private lender Yes Bank on Wednesday reported a 91 per cent drop in net profit on a yearly basis at Rs 114 crore for the three months ended June 30, 2019 due to high gross slippages of Rs 6,232 crore, lower other income and a one-off impact from mark to market provisions of Rs 1,109 crore. The Bank's asset quality continued to surprise negatively.
According to analysts, the pool of BB and below rated portfolio remains as high as Rs 29,000 crore and over Rs 7,000 crore of watch list portfolio is likely to keep the slippages elevated. The Bank will require to raise capital they said.
The private lender had reported a profit of Rs 1,260 crore in the same quarter last year.
Net interest income during the quarter grew 2.8 per cent year on year to Rs 2,281 crore with muted loan of 10.1 per cent. However on a sequential basis, NII and loan book degrew 9 per cent and 2.2 per cent in Q1. The interest reversal of Rs 223 crore on account of fresh slippages during the quarter impacted net interest income. Consequently the NIM contracted to 2.8 per cent in quarter ended June 2019 against 3.1 per cent in the March quarter and 3.3 per cent in the year-ago period.
Total provisions came in at Rs 1,784.1 crore, up three times over Rs 625.70 crore made in the same quarter last year. The bank had made Rs 3,661.70 crore provisions in the March quarter. PCR was unchanged at 43.1 per cent in Q1FY20 compared to Q4FY19. The bank said net provisions at Rs 1,784 crore for June quarter included one-off impact of Rs 1,109 crore of investment MTM provision led by rating downgrades of investments in companies of two financial services groups.
Gross non-performing assets for the quarter spiked to 5.01 per cent against 3.22 per cent in the March quarter and 1.31 per cent in the year-ago period. The Bank said it reported gross slippages at Rs 6,232 crore. "Net corporate slippages were entirely from the accounts classified as BB and below at end of Q4FY19."
"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 bank's management said.
