Yes Bank reported a profit after tax of Rs 2,628 crore for the quarter ended March, which adjusted for an extraordinary item was a loss of Rs 3,668 crore. Asset quality improved, compared to the previous quarter, but stress levels were high. More provisions for bad loans caused the bank to report losses, even as it reported an operating profit of Rs 106 crore for the quarter.

Here is all you need to know about the bank’s fourth quarter earnings.

PROFIT/LOSS

In its notes to accounts, Yes Bank disclosed that Additional Tier-1 bonds amounting to Rs 8,415 crore had been fully written down permanently on March 14, 2020 as part of the bank’s restructuring scheme.

Thanks to this extraordinary item, the bank made Rs 6,296 crores net of taxes during the quarter, helping it to post a profit. Profit after tax stood at Rs 2,628 crores in Q4 vs a historic loss of Rs 18,560 cores posted in Q3.

At the operating level, the bank did better, reporting a profit Rs 106 crore for Q4 against a loss of Rs 6 crore in the previous quarter.

INTEREST INCOME

Net interest income, which is interest earned minus interest paid out, was down 49 percent year-on-year, but up 20 percent quarter-on-quarter. NII stood at Rs 1,273.7 crore for the quarter ending March versus Rs 2,505.9 crores during the same quarter last year.

Non-interest income stood at Rs 597 crore for Q4, down 5 percent over the previous quarter, but higher by 12 percent over last year.

This took the total income (net interest income plus non-interest income) to Rs 1,871 crores as of March 2020.

Net Interest Margin or NIM for the bank stood at 1.9 percent for Q4 against 1.4 percent in Q3 and 3.1 percent during the March quarter of the previous year.

PROVISION BUFFERS

Provisions for the quarter ending March stood at Rs 4,872 crores, against Rs 3,662 crores in Q4 FY19 and Rs 24,766 crores in Q3. Of this, provision for bad loans stood at Rs 1,100 crores and provision for standard accounts at Rs 436 crores, including Rs 238 crores on account of COVID-19 impact, in Q4.

The overall Provision Coverage Ratio or PCR improved to 73.77 percent in Q4 compared to 72.70 percent in Q3.

ASSET QUALITY

Gross non-performing assets (NPAs) stood at Rs 32,877 crore in the March quarter, up from Rs 7,882 crore (3.22 per cent) a year ago, but down sequentially from Rs 40,709 crore in Q3.

Gross NPA ratio improved to 16.8 per cent in Q4 versus 18.87 percent during the previous quarter, and the net NPA ratio improved to 5.03 percent in Q4 from 5.97 percent earlier.

Loans overdue 30-60 days, or Special Mention Accounts-1 (SMA 1) now stand at Rs 10,781 crores, down from Rs 11,528 crores in Q3, and SMA-2 accounts, that is loans overdue 60-90 days, stand at Rs 321 crores as of Q4 compared to Rs 2,383 crores in Q3.

The gross addition to bad loans for the quarter stood at Rs 493 crores, recoveries and upgrades at Rs 1,903 crores, and technical write-offs at Rs 6,358 crores.

The bank also said that its high-risk accounts, recognised in its BB-rated and below book have risen to 11 percent of the total book in Q4 from 7 percent in the last quarter.

Speaking to CNBC-TV18 after posting the earnings, its MD & CEO Prashant Kumar said that the bank would have additional bad loans or slippages in the range of Rs 8,000 crores to Rs 17,000 crores during the year in the worst-case scenario.

DEPOSITS

Deposit outflows continued during the March quarter, and even after. The total deposit base shrunk 36 percent quarter-on-quarter to Rs 105,367 crore, by more than 50 percent compared to the year before.

Further, the bank disclosed it lost another Rs 2,647 crores of deposits between March 31 and May 2, 2020.

The current account saving account ratio stood at 26.6 percent as of Q4 vs 32.1 percent Q3. In absolute terms, CASA funds at Rs 28,063 crore were down 62.7 percent year-on-year and 47.3 percent quarter-on-quarter.

ADVANCES

Yes Bank’s total advances stood at Rs 1,71,443 crores, down 29 percent over the same quarter last year, and lower by 7.9 percent over the previous quarter.

The retail plus MSME book now contributes almost 44 percent to total advances, with corporate advances still accounting for 56 percent of the book.

CAPITAL ADEQUACY & FUNDRAISING

Yes Bank’s capital adequacy remained below RBI mandated minimum levels. The bank’s total capital adequacy ratio (CAR) improved at 8.5 percent in Q4 from 4.1 percent in Q3, with core equity or CET-1 ratio improving to 6.3 percent from 0.6 percent in the previous quarter. Its Tier-1 capital stood at 6.5 percent as of Q4. This after 8 financial institutions led by State Bank of India infused Rs 10,000 crores of capital into the bank during the quarter.

Yes Bank also breached the SLR and Liquidity Coverage Ratios, leading to a penalty of Rs 334 crores impose don it by RBI.

Prashant Kumar, CEO of the bank, said that the lender would need an additional Rs 8,800 crores of capital to meet over CET ratio requirement of 10 percent. He said that the bank has appointed merchant bankers for the next round of fundraising, and that the bank already has an approval to raise up to a maximum of Rs 15,000 crores of capital.

Kumar added that the bank intends to complete the second round of capital raising by June 30th, 2020, or at least by July 15th, latest.

RBI MORATORIUM SCHEME

Almost 40-45 percent of the bank’s customer opted for moratorium under RBI’s March 27 circular.

The bank said that in accordance with the RBI guidelines relating to COVID-19 Regulatory Package, it has offered a moratorium of three months on the payment of all unpaid installments and/or interest, as applicable, falling due between March 1, 2020 and May 31, 2020 to all eligible borrowers classified as Standard as on Feb 29, 2020.

Eligible borrowers with overdue exposures as on Feb 29,2020 had a total outstanding of Rs 14,956 crores as on March 31, 2020, which included NPA standstill of Rs 2,713 crores, for which the bank has provided Rs 238 crore.

First Published:May 7, 2020 12:19 PM IST