Yes Bank slides as asset quality deteriorates in Q2

Yes Bank fell 3.53% to Rs 64.25 after the bank reported net loss of Rs 600.08 crore in Q2 September 2019 as compared to net profit of Rs 964.70 crore in Q2 September 2018.

Yes Bank's overall profitability was hurt by a deferred tax asset (DTA) impact that resulted in a one-time additional charge of Rs 708.61 crore arising on account of change in corporate tax rate regime. Excluding this onetime impact, adjusted profit after tax (PAT) stood at Rs 109 crore in Q2 September 2019.

The bank's profit before tax stood 122.19 crore in Q2 September 2019, down by 91.43% from 1426.46 crore in Q2 September 2018.

The total income of the bank fell 4.28% to Rs 8332.21 crore in Q2 September 2019 over Q2 September 2018. The result was announced after market hours on Friday, 1 November 2019.

The bank's net interest income (NII) fell 9.6% to Rs 2,186 crore in Q2 September 2019 over Q2 September 2018. The net interest margin stood at 2.7% as on 30 September 2019 as against 3.3% as on 30 September 2018.

The bank's asset quality deteriorated significantly on a quarter-on-quarter (Q-o-Q) basis. Gross non-performing assets (NPAs) stood at Rs 17,134.41 crore as on 30 September 2019 as against Rs 12,092.10 crore as on 30 June 2019 and Rs 3,866.08 crore as on 30 September 2018.

The ratio of gross NPAs to gross advances stood at 7.39% as on 30 September 2019 as against 5.01% as on 30 June 2019 and 1.60% as on 30 September 2018.

The ratio of net NPAs to net advances stood at 4.35% as on 30 September 2019 as against 2.91% as on 30 June 2019 and 0.84% as on 30 September 2018.

Provisions and contingencies jumped 42.16% to Rs 1336.25 crore in Q2 September 2019 over Q2 September 2018.

Provision coverage ratio of the bank stood at 43.1% as on 30 September 2019 as against 47.8% as on 30 September 2018.

Cost to income ratio increased sharply to 53.4% in Q2 September 2019 from 44.9% in Q1 June 2019 and 39.2% in Q2 September 2018.

On 31 October 2019, Yes Bank said it received a binding offer from a global investor for an investment of $1.2 billion in the bank through fresh issuance of equity shares. The offer is subject to regulatory approvals/conditions as well as bank's board and shareholders approvals, the bank said.

Media reported that Singapore-based DBS Bank is may acquire 51% stake in Yes Bank. However, DBS Bank, on 2 November, clarified that the rumours of DBS acquiring a stake in Yes Bank are unfounded and baseless.

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