YES Bank reported a 91 per cent decline in its net profit at Rs 113.8 crore in the April-June quarter (Q1) of 2019-20 (FY20) because of a mark-to-market provisioning of Rs 1,109 crore for bad loans and decline in non-interest income.
In the same quarter of the last financial year (2018-19 or FY19), the bank’s profit was Rs 1,260 crore. The bank had posted its first-ever quarterly loss in January-March quarter of FY19 at Rs 1,507 crore.
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.
In the quarter under review, YES Bank’s provisions stood at Rs 1,784 crore. In the same quarter of FY19, the bank provided Rs 625 crore. In Q4FY19, the banks provisions stood at Rs 3,661 crore.
The bank’s gross non-performing assets (NPAs) rose 5.01 per cent to Rs 12,092 crore. In Q1FY19, the bank’s gross NPAs stood at 1.31 per cent.
The net NPAs soared to 2.91 per cent in Q1FY20 at Rs 6,883 crore, compared to 0.59 per cent in the same quarter last year. It sold one account with an exposure of Rs 412 crore to an asset reconstruction company (ARC) during the June quarter.
The bank reported gross slippages of Rs 6,232 crore during Q1FY20.
“Net corporate slippages were entirely from the accounts classified as ‘BB’ and below at the end of Q4FY19,” said the bank.
In the last quarter, the bank had a stress book of Rs 10,000 crore for which it has set aside contingency provisions of Rs 2,100 crore. Of this, the bank used Rs 1,399 crore for specific provisioning against NPAs in Q1FY20.
The net interest income of the bank grew marginally by 2.8 per cent to Rs 2,280 crore in Q1FY20 versus Rs 2,219 crore in the Q1FY19. However, the total income of the bank declined 9.2 per cent to Rs 3,553 crore opposed to Rs 3,913 crore in same quarter last year.
The non-interest income of the bank fell 25 per cent to Rs 1,272 crore; in the same quarter of the previous financial year, it was Rs 1,694 crore.
The provisioning coverage ratio, an indicator of the provision made against bad loans from the profit generated, stood at 43.1 per cent. On a year-on-year basis, the PCR has come down significantly but quarter on quarter, it remained the same.
The net interest margin (NIM), a measure of profitability of the banks, stood at 2.8 per cent. The NIM in the first quarter of FY19 stood at 3.3 per cent. The credit cost of the bank during the June quarter was 32 basis points (bps) while it was 15 bps in the June quarter of FY19. In the March quarter of FY19, the credit cost of bank was 137 bps.
The capital adequacy of the bank stood at 15.7 per cent with total capital funds at Rs 50,569 crore. The bank is looking to raise close to $1 billion to boost the capital adequacy.
About probe into whistle-blower complaints, the bank said it conducted an internal enquiry of the allegations. The internal enquiry of the allegations resulted in a report reviewed by the board of directors. The bank further engaged an external firm to independently examine the matter.
“Based on work done and findings till date, the bank has not identified any material financial statement implications. The bank will consider the implications of ongoing work once the examination of this matter is completed,” YES Bank said.
“The bank, at the direction of the audit committee and with the assistance of this external firm, is continuing to analyse the allegations in the whistleblower complaint and work is currently ongoing,” it said.
Yes Bank closed 5.25 per cent lower at Rs 98.45 on the BSE.