Yes Bank: NPAs improve sequentially; bond write-off helps post Rs 2,629 crore Q4 profit

Private sector lender Yes Bank, which was recently bailed out through investments by State Bank of India and a few other private sector rivals, reported a net profit of Rs 2,629 crore in the fourth quarter, helped by Rs 8,415 crore income from write-down of Basel III compliant additional tier-1 bonds.

Having failed to raise the much needed capital, Yes Bank board was superseded by the Reserve Bank of India in March. A few days later, under a RBI-led reconstruction scheme, SBI, the country’s largest bank, and seven private sector lenders invested Rs 10,000 crore in Yes Bank.  

As a part of the reconstruction scheme, the investment in the bank’s AT-1 bonds was written-off.

If that extraordinary income was to be excluded, Yes Bank reported a loss of Rs 3,668 crore in the January-March quarter, more than double that of Rs 1,507 crore loss it had reported in the same period a year ago as overall provisioning increased. In the October-December quarter, the bank had reported a massive Rs 18,560 crore loss.

Its net interest income declined 49 per cent year-on-year to Rs 1,274 crore last quarter, from Rs 2,506 crore a year ago although it was up 20 per cent over the December quarter figure of Rs 1,065 crore.

In the fourth quarter, Yes Bank provided for Rs 4,872 crore, versus Rs 3,662 crore in the year ago quarter and Rs 24,766 crore in the third quarter. Provisioning for non-performing assets stood at Rs 1,100 crore, versus Rs 1,270 crore in the year ago quarter.

Its gross non-performing assets have improved quarter-on-quarter to 16.80 per cent in the Jan-March quarter, from 18.87 per cent in Oct-Dec. However, they are still far higher compared with the 3.22 per cent GNPAs it had reported a year ago.

Similarly, its net NPAs were at 5.03 per cent in March, versus 5.97 per cent in December and 1.86 per cent in March 2019.

Over the last few quarters, as the bank was finding it difficult to raise the much needed capital, it saw a massive withdrawal of deposits. At the end of March, its total deposits stood at Rs 105,364 crore, down 54 per cent year-on-year and 36 per cent lower compared with the third quarter.

Yes Bank’s advances also declined to Rs 171,443 crore in the March quarter from Rs 186,099 crore in December quarter and Rs Rs 241,500 crore a year ago.

The lender says its outflows in deposits post March 31 have now receded and an analytics-driven extensive customer outreach programme was underway.

“In April, the bank made the highest ever contacts made across all sales and service roles. In April, the number of retail fixed deposits booked higher than any month in fiscal year 2020,” said Yes Bank.

Yes Bank had over the years had focused on corporate loans. Its now transitioning itself with the objective of getting more than 60 per cent of its advances from retail and micro, small and medium enterprises. Its also targeting a stable liability mix and lower cost of funds with a CASA (current account-savings account) ratio of over 40 per cent.  

Post the bailout under a RBI-led reconstruction scheme, SBI now holds 48.2 per cent stake in Yes Bank. The other shareholders include ICICI Bank (8 per cent), HDFC (8 per cent), Axis Bank (4.8 per cent), Kotak Bank 3.6 per cent), Bandhan Bank (2.4 per cent), Federal Bank (1.9 per cent) and IDFC First Bank (1.7 per cent). Other shareholders hold 21.4 per cent in Yes Bank.