Yes Bank posts ₹18,564 cr. Q3 loss

Provisions zoom; capital adequacy ratio below mandated level

The impact of the moratorium on the depositor confidence is uncertain, Yes Bank said. afp

Private sector lender Yes Bank posted a whopping ₹18,564 crore loss for the third quarter of the current financial year as bad loans surged. The bank had posted a net profit of ₹1,000 crore during the corresponding period of the previous year.

The lender had delayed the announcement of its earnings for the third quarter. Last week, the government had put the lender under moratorium while dismantling the board and appointed an administrator.

Gross non-performing assets went up to ₹40,709 crore, which is 18.87% of gross advances, from ₹17,134 crore, or 7.39%, at the end of the second quarter. Net NPAs jumped to ₹11,114 crore from ₹9,757 crore sequentially. As a result, provisions excluding tax expenses, were ₹24,765 crore for the third quarter as compared to ₹1,336 crore reported in the second quarter. The bank recognised additional provisions of ₹15,422 crore in the most recent quarter.

Higher provisions depleted its capital adequacy ratio, which fell much below the regulatory requirement. The ratio as on end December 2019 was 4.1%, as compared to 16.3% in end September.

The bank said its deposit base was reduced from ₹2,09,497 crore as on September 30, 2019 to ₹1,65,755 crore as on December 31, 2019. “The impact of the said moratorium on the depositor confidence is uncertain. However, the bank has additional liquidity from RBI and expects to raise funds from CD issuance to take care of any probable outflow of deposits on withdrawal of the moratorium,” the bank said in the notes of account.

For the nine-month period, the loss of the bank stood at ₹19,046 crore.

“The bank has a total deferred tax asset of ₹8,029.2 crore as at December 31, 2019. Based on financial projections approved by the administrator, the bank is expected to have sufficient future taxable income to utilise the said deferred tax assets,” the lender said.

“The bank has Basel III complaint additional Tier 1 bonds of ₹8,695 crore and believes AT 1 bonds amounting to ₹8,695 crore can be utilised to enhance the common equity as of date,” the notes said.