Private sector lender YES Bank on April 30 reported a higher-than-expected loss of Rs 3,787.75 crore for the quarter ended March 2021, dampened by elevated loan loss provisions and lower net interest income (NII). The loss in the year-ago quarter stood at Rs 3,668.33 crore.
"Despite elevated slippages, the bank has prudently made accelerated provisioning reflected in the PCR (provisioning coverage ratio) for NPA at around 79 percent and PCR for NPI at around 92 percent, resulting into a net loss of Rs 3,788 crore," the bank said in its earnings release.
Net interest income, the difference between interest earned and interest expended, plunged 22.5 percent to Rs 986.7 crore during the quarter under review as compared to Rs 1,273.70 crore in the year-ago quarter.
Advances for the quarter at Rs 1.66 lakh crore declined 2.7 percent year-on-year (YoY), with net interest margin falling 30 bps YoY (down 180 bps QoQ) to 1.6 percent in Q4FY21,
Deposits grew significantly by 54.7 percent YoY to Rs 1.62 lakh crore during the quarter ended March 2021.
The numbers missed analysts' expectations as loss was expected at Rs 1,076.5 crore while net interest income was seen at Rs 1,937.8 crore, according to the average estimates of analysts polled by CNBC-TV18.
Provisions and contingencies for Q4FY21 came in at Rs 5,239.6 crore, up 7.5 percent as compared to the year-ago quarter. On a sequential basis, the figures witnessed a massive jump of 138.3 percent.
The provision coverage ratio (including technical write-offs) declined to 78.6 percent in March quarter 2021, compared to 81.5 percent in the previous quarter, YES Bank said in its BSE filing.
The bank further said it has proactively made a provision of 10 percent against around Rs 2,500 crore of loans which are in advanced stages for implementation of restructuring under COVID regulations (Q1FY22). "Of the above, around Rs 2,200 crore is part of the 61-90 days overdue book and around Rs 150 crore is part of the 31-60 days overdue book," it said.
Proactive provisioning of around Rs 250 crore towards COVID-19 related restructuring (around Rs 2,500 crore) is expected to be implemented in Q1FY22, YES Bank said.
Asset quality weakened further with net non-performing assets (NNPAs), as a percentage of gross advances, rising 184 bps sequentially to 5.88 percent, while there was 5 bps sequential increase in gross NPAs.
In line with Supreme Court Judgement & RBI Circular dated April 7, 2021, YES Bank has classified borrowers as per the extant IRAC norms and hence gross slippages at the end of March 2021 quarter stood at Rs 11,873 crore.
"It has been a year since the reconstruction & the pandemic. We had to solve liquidity, governance, risk culture, growth and trust during the year," said Prashant Kumar, CEO in the press conference.
"The slippages going forward would be less than our cash recovery in FY22," said Kumar who expects slippages for FY22 to remain below Rs 5,000 crore.
Kumar further said that YES Bank made cash recovery of Rs 4,933 crore during the year from stressed assets, and will sustain growth in FY22 while maintaining comfortable capital buffers. "The bank has a minimum cash recovery target of Rs 5,000 crore for FY22," he added.
"YES Bank had a choice to make minimum provision on slippage, but it opted for making higher provision. And we have made 10 percent upfront provision for restructured accounts. Bulk of the slippages are due to COVID hit." the CEO said further.
Recoveries and upgrades were at Rs 2,487 crore in Q4FY21, while write-offs were at Rs 10,323 crore during the quarter, said the bank, adding net NPA for retail, SME and Medium Enterprises were at less than 1 percent.
Non-interest income (other income) at Rs 816.04 crore in Q4FY21 surged 36.6 percent YoY, and pre-provision operating profit shot up 73.7 percent to Rs 184.88 crore during the quarter ended March 2021.