YES Bank net falls 91% on higher provisioning

Private sector lender YES Bank on Wednesday reported a 90.97% year-on-year drop in its net profit for the April-June quarter at Rs 113.76 crore on account of lower income and higher provisioning.

Sequentially, the company reported a net loss of Rs 1,506.64 crore in the March quarter.

Other income, which includes fees and commission earned from guarantees or letters of credit, loans, financial advisory fees, declined to Rs 1,272.66 crore in April-June quarter as against Rs 1,694.14 crore in the corresponding period last fiscal, whereas the bank's provisions during the quarter increased to Rs 1,784.11 crore as against Rs 625.65 crore.

However, in the March quarter, the company kept aside Rs 3,661.70 crore in provisions. The downgrade of two finance companies led to a Rs 1,109 crore hit in provisions during the reporting quarter.

This is the second consecutive quarter the bank has shown a massive hit on the bottomline since the new management under Ravneet Gill took over in March after the exit of promoter-chief executive Rana Kapoor.

YES Bank's fresh slippages nearly doubled at Rs 6,232 crore in the reporting quarter compared to Rs 3,408 crore in the previous quarter, leading to gross non-performing assets (NPAs) rising to 5.01% of the total advances in the June quarter as against 3.22% in the March quarter and 1.31% in the year-ago quarter.

Post provision, the net NPA ratio stood at 2.91% as against 1.86% in the March quarter and 0.59% in the year-ago period.

In a statement accompanying the fourth-quarter results, the lender said, "This was a 'quarter of consolidation' in which the bank has demonstrated strong resilience in revenues and asset quality. We believe that the earnings trajectory should strengthen significantly from here on."

On Wednesday, shares of YES Bank, which has been on a slide since Kapoor's termination, lost 5.25% to close at Rs 98.45 a piece, while the benchmark Sensex index gained 0.22% to close at 39215.64. The results were announced after the market close.

At the time of announcing fourth-quarter results, the bank had said it has identified assets of over Rs 10,000 crore, which led it to provide an additional Rs 2,100 crore and report a maiden quarterly loss. Later, reports expressing concern over its exposure to companies like DHFL, the Anil Ambani Group companies and the realty sector came up.

It sold one account with an exposure of Rs 412 crore to an asset reconstruction company during the reporting quarter.