Yes Bank reports Rs 18,564.2-crore loss in Q3; NPAs saw a sharp rise

Gross NPAs gallop to Rs 40,709 crore in Dec 19

Private sector lender YES Bank on Saturday reported a net loss of Rs 18,564.24 crore for the December quarter (Q3FY20), as against a net profit of Rs 1,000.57 crore in the corresponding period of FY19.

The troubled bank, which announced its Q3 numbers after weeks of delay, reported a pre-tax loss of Rs 24,778 crore in Q3FY20 compared with a pre-tax profit of Rs 1,442 crore in the year-ago period. It had posted a net loss of Rs 629 crore in the quarter ended September 2019.

Gross non-performing assets (NPAs) saw a sharp rise to 18.87 per cent compared with a meagre 2.10 per cent in the same period of FY19. In absolute terms, the gross NPA figure for the December quarter stands at Rs 40,709 crore compared with Rs 5,158 crore in Q3FY19, a rise of over 600 per cent. At the end of Q2FY20, the gross NPA of the bank stood at 7.39 per cent. The net NPA of the bank at the end of the December quarter stood at 5.97 per cent. In Q3FY19, the bank reported net NPA of 1.18 per cent.

The lender has made provisions to the tune of Rs 15,422 crore in the quarter ended December 31, 2019, as against Rs 550 crore in Q3FY19. Sequentially, the bank had set aside Rs 1,336.25 crore in September 2019 quarter as provisions and contingencies.

The bank has recognised additional NPAs to the tune of Rs 5,150 crore and made additional provisioning of Rs 772.5 crore.

At the end of December 2019, the bank breached the regulatory requirements of maintaining the minimum CET1 (Common Equity Tier 1) ratio. The CET 1 ratio of the bank stood at 0.60 per cent as compared to the minimum requirement of 7.375 per cent. The breach is primarily on account of the increase in the provision for advances during the quarter ended 31 December 2019 as the bank has decided, on a prudent basis, to enhance its provision coverage ratio on its non-performing loans over and above RBJ loan level provisioning and also considered slippages.

The bank has also breached the minimum statutory liquidity ratio (SLR) and liquidity coverage ratio (LCR) requirements of the RBI during the quarter and has provided an amount of Rs 86 crore for the expected penalty on the SLR breach.

“The RBI proposed a draft reconstruction scheme on 6 March 2020 which envisaged that the Bank would be able to write down Additional Tier 1 (' A Tl') securities amounting to Rs 8,695 crore to equity. The final Scheme issued by the Government of India does not contain any reference to the write down of the A Tl securities. These conditions, along with other matters as stated in the said note, indicate that a material uncertainty exists that may cast significant doubt on the Bank's ability to continue as a going concern,” said the bank’s auditor.