Yes Bank Reported Net Profit of ₹2,629 Crore in Q4

Yes Bank Reported Net Profit of ₹2,629 Crore in Q4

Yes Bank has reported a net profit of ₹2,629 crore in the fourth quarter from January-March, compared to a loss of ₹1,507 crore a year ago. 

The bank had extraordinary items (net of tax) of ₹6,297 crore in Q4 from write-down of additional AT1 bonds worth ₹8,415 crore. 

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Shown as an extraordinary item in the profit and loss account, the income from the write-down (net of tax) was 6,297 crore in Q4. Had it not been for this item, the bank would have reported a net loss o3,668 crore in the March quarter.

On 13 March, the government had approved a rescue plan for Yes Bank backed by SBI. Under the plan, domestic investors including SBI, Housing Development Finance Corp, ICICI Bank, Kotak Mahindra Bank, Bandhan Bank, Federal Bank and IDFC First bank invested 10,000 crore into Yes Bank. In the rescue process, Yes Bank’s AT1 bonds worth 8,415 crore were written down in full in March.

The bank was expected to post a net loss of 4,218.9 crore in the March quarter of FY20, according to average estimates of four analysts polled by Bloomberg.

Its total provisions stood at 4,872 crore in Q4 FY20, 33% higher than the same period last year. The private sector lender’s net interest margin (NIM), a key measure of profitability, was 1.9% in the quarter under review, down 120 basis points (bps) from Q4 of FY19. Its net interest income (NII), difference between interest earned and expended, stood at 1,274 crore, down 49% on a year-on-year (y-o-y) basis.

The bank’s asset quality deteriorated on a y-o-y basis but improved sequentially. Its bad loans as a percentage of total loans stood at 16.8% in Q4 FY20, up from a mere 3.22% in Q4 FY19 and down from 18.87% in the December quarter of FY20.

Following the capital infusion by a clutch of private and public sector lender, Yes Bank’s total capital adequacy ratio stood at 8.5% in the March quarter, of which common equity tier I (CET1) ratio was 6.3% and Tier II ratio was at 2%.

In March, Yes Bank had reported a record loss of 18,564 crore in the quarter ending 31 December, 2019 owing to a sharp jump in bad loans and higher provisioning.

The bank also disclosed on Tuesday that its total deposits have shrunk 36% to 1.05 trillion between 31 December, 2019 and 31 March, 2020. Of this, it saw a 59% quarter-on-quarter (q-o-q) decline in current account deposits and a 38% fall in savings account deposits, in the same period.

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