Yes Bank shrinks its loan book by 4% to enhance capital efficiency

The lender says its financial and operating metrics are intrinsically sound and stable, with liquidity position well in excess of regulatory norms

Private sector lender Yes Bank has shrunk its loan book by four per cent to Rs 2.32 trillion in three months ended September 2019 to enhance efficiency of capital.

The financial and operating metrics remain intrinsically sound and stable, with liquidity position well in excess of regulatory requirements, the bank headed by Ravneet Gill said in a statement. This statement comes in the backdrop of the reports about the challenges Yes Bank may face from exposure to non-banking finance firms that have funded the troubled real estate sector.

The Yes Bank stock has dropped sharply over the past few weeks, closing 23 per cent down to Rs 32 a share on the Bombay Stock Exchange on Tuesday.

The lender's gross advances aggregated to about Rs 2.32 trillion as on September 30, compared to Rs 2.42 trillion on June 30, with a higher share of retail advances as compared to June 30. The reduction in advances was effected to enhance capital efficiency, bank said.

It said over the past few days, there has been unfounded speculation about the bank’s deposits and liquidity. The lender had a comfortable liquidity and funding position, with a liquidity coverage ratio in excess of 125 per cent as on September 30, which is well above the minimum regulatory requirement of 100 per cent.

Further, deposits aggregated to about Rs 2.09 trillion as on September 30. The share of low cost funds – money in current account and savings account (CASA Ratio) improved to about 30.8 per cent from 30.2 per cent as on June 30, Yes Bank added.