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Last Updated : Jul 17, 2019 05:09 PM IST | Source: Moneycontrol.com

Yes Bank Q1 profit falls 91% on high provisions, NPA spikes with gross slippages at Rs 6,232 cr

Net interest income during the quarter grew 2.8 percent YoY to Rs 2,281 crore with muted loan growth of 10.1 percent

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Private sector lender Yes Bank turned the corner in June quarter with a Rs 113.76 crore standalone profit against loss of Rs 1,506.64 crore in the previous quarter due to sharp fall in provisions.

However, the profit plunged 91 percent YoY on nearly three-fold increase in provisions and weak asset quality. Lower other income, NII and operating income also dented profitability.

Net interest income during the quarter grew 2.8 percent YoY to Rs 2,281 crore with muted loan growth of 10.1 percent. However, on sequential basis, NII and loan book degrew 9 percent and 2.2 percent in Q1.

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The interest reversals of Rs 223 crore on account of fresh slippages during the quarter impacted net interest income.

Consequently net interest margin contracted to 2.8 percent in quarter ended June 2019, down 50bps YoY and 30bps QoQ, the bank said, adding deposits at Rs 2.25 lakh crore for the quarter registered a 5.9 percent growth YoY and 0.8 percent degrowth QoQ.

Provisions for bad loans shot up significantly by 185.2 percent year-on-year to Rs 1,784.1 crore, but fell 51.3 percent quarter-on-quarter. Provision coverage ratio was unchanged at 43.1 percent in Q1FY20 compared to Q4FY19.

"Net provisions included one off impact of Rs 1,109 crore of investment MTM provision led by rating downgrades of investments in companies of 2 financial services groups," the bank reasoned.

Asset quality deteriorated sequentially. Gross non-performing assets as a percentage of gross advances increased 179 bps sequentially to 5.01 percent (Rs 12,092 crore) and net NPA jumped to 105bps QoQ to 2.91 percent (Rs 6,883.27 crore).

Yes Bank said it reported gross slippages at Rs 6,232 crore during June quarter. "Net corporate slippages were entirely from the accounts classified as BB & below at end of Q4FY19."

Recoveries and upgrades aggregated to Rs 1,678 crore during the quarter.

After a credit cost of 32 bps during Q1FY20, the bank said it remained confident of retaining within the guided range of up to 125 bps for FY20.

Other income (non-interest income) fell by 25 percent year-on-year to Rs 1,272.66 crore and operating profit slipped 20 percent to Rs 1,959 crore in June quarter.

The stock closed at Rs 98.45, down 5.25 percent, on the BSE, ahead of June quarter earnings. It has corrected 72 percent in last one year.

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First Published on Jul 17, 2019 04:31 pm
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