Published: Fri, April 27, 2018
Finance | By Loren Pratt

Yes Bank gains 29 percent Q4 profit

Yes Bank gains 29 percent Q4 profit

This is the first ever quarterly loss for the private sector lender in the last 20 years.

The bank said its accelerated recognition of bad loans (particularly in the power sector) led to an increase in provisioning.

There has been a one-time impact of the RBI's new framework for stressed assets (that essentially does away with all the old restructuring schemes), driving recognition in the bank's restructured book. Net profit for the financial year 2017-18 shrunk 93 per cent year-on-year (YoY) to end at Rs 276 crore.

Yes Bank shares were trading up 4.72% or Rs 15.40 higher at Rs 340.65 at 2.22 pm on the National Stock Exchange (NSE).

Interest income was up 32%. During the day, it jumped 11 per cent to Rs 361.20.

On asset front, the gross non-performing assets (NPAs) of the bank were lowered to 1.28 per cent of the gross advances as on March 31, 2018 from 1.52 per cent at the end of 2016-17.

Given that about 90 per cent of slippages (on an average) in the past several quarters have come from BB & below rated book, the significant shrinkage in this book is a positive. As on March 31, 2018, the bank's GNPA was Rs 34,249 crore and net NPA was Rs 16,592 crore.

"The bank has recognised slippages of Rs 16,536 crore during Q4FY18".

The bank also made a disclosure on divergences, or under-reporting of NPAs that had bloated the dud asset pile in the preceding quarter. Most of the corporate slippages, nearly 90 per cent came from the BB book particularly the power sector The watch list is now closed and in Q4 it is (just) Rs 428 crore... "Infra play did not work out well, and now it is critical that we complete the NPA recognition cycle".

For FY19, the bank has charted a four-step plan comprising normalisation of credit risk, delivering profitable growth, enhancing capabilities and investing in the future, Sharma said.

Even though it is well-capitalised with an overall buffer of over 18 per cent, the bank board has chose to raise up to United States dollars 1 billion in core equity, Kapoor said, adding it may consider raising the money by the end of the FY19 if it sees some opportunities for its use.

The bank saw its provisions and contingencies spiking almost three-fold to Rs 7,179.53 crore in the fourth quarter against Rs 2,581.25 crore previous year.

It is also targeting to increase its provision coverage ratio to 60 per cent from 50 per cent now.

Speaking to reporters, CEO Shikha Sharma admitted that the bank's bet on infrastructure earlier has not turned out well.

Reports suggest that the Reserve Bank of India had intervened in the Board's decision that cleared Sharma's reappointment for the fourth term for another three years in July last year.

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