YES Bank tanks 12% on heavy volumes as Q3 net plunges 81%

Shares of YES Bank has tanked 12 per cent to Rs 17.35 on the BSE in Monday’s intra-day trade in an otherwise firm market on the back of heavy volumes followed weak December quarter (Q3FY23) results.

At 10:23 am; YES Bank quoted 9 per cent lower at Rs 17.95, as compared to 0.76 per cent rise in the S&P BSE Sensex. The average trading volumes at the counter more-than-doubled today. A combined 261 million shares changed hands on the NSE and BSE so far.

In Q3FY23, YES Bank’s net profit declined by 80.7 per cent year-on-year (YoY) to Rs 52 crore on increase in provisions for ageing bad loans. The private sector lender had posted a net profit of Rs 266 crore in Q3 of FY22. Net profit was lower in Q3FY23 compared to Q2FY23 when the figure stood at Rs 153 crore. Provisions increased 44.9 per cent sequentially and 125.5 per cent YoY at Rs 8448 crore.

The bank’s net interest income (NII) was up 11.7 per cent YoY and declined 1 per cent quarter-on-quarter (QoQ) at Rs 1,971 crore. Net interest margin (NIMs) were down 10 bps QoQ at 2.5 per cent. The management said it would be difficult to give guidance on margins (NIMs) due to pressure from pricing deposits.

During the quarter the bank has completed assignment of stressed pool to J.C. Flowers ARC, hence GNPA ratio improved to 2 per cent vs 12.9 per cent in Q2FY23 and 14.7 per cent in Q3FY22.

Meanwhile, the Bombay High Court set aside YES Bank's administrator decision to write down AT1 bonds of Rs 8,000 crore held by bondholders and retail investors. However, the court stayed the order for six weeks, during which YES bank may approach the Supreme Court.

The bonds were written off as part of a restructuring plan and of total equity shares ~75 per cent of the shares were subject to a lock-in for three years. The RBI likely to appeal the Bombay high court ruling that quashed the regulator and YES Bank administrator’s decision to write off additional tier-I (AT-I) bonds. READ MORE

Referring to High Court judgement on AT1 bonds Prashant Kumar, its managing director and chief executive said in an extreme case scenario, when AT1 bonds are restored, Common Equity tier I (CET1) may come down and AT1 will go up.

“The order is not expected to have an adverse impact on Bank’s tier I capital. The management indicated that the bank will appeal before Supreme Court and hence further developments remain watchful”, ICCI Securities said in a note.