INSUBCONTINENT EXCLUSIVE:
Mumbai: Yes Bank’s profit fell 7 per cent in the third quarter ended December 2018, compared with a year-ago, as the bank had to make a
hefty provision for loans given to debt laden ILFS
Net profit fell to Rs 1,001 crore, or Rs 4.3 per share, from Rs 1,077 crore, or Rs 4.7 per share a year ago.
Total provisions increased to
Rs 550 crore from Rs 421 crore a year ago as the private lender had to set aside Rs 508 crore as NPA provisions, including Rs 478 crore for
loans linked to ILFS.
Senior group president Rajat Monga said the bank’s credit costs will increase to 80 basis points of its total loan
book, up from the bank’s guidance of 70 basis points at the start of the year due to slippage from the ILFS loan
One basis point is 0.01 percentage point.
Gross NPAs increased to 2.10 per cent of the bank’s loan book, up from 1.72 per cent a year ago
and higher than 1.60 per cent reported in the quarter ended September 2018
The bank’s provision coverage ratio dropped to 44 per cent from 48 per cent in September 2018.
“We believe that the provisions are
adequate as we expect to see some results from the asset sales initiated in this account in the next three to six months
There is already some sufficient and visible interest in these businesses,” said Monga.
Yes Bank has a total exposure of Rs 2,530 crore to
ILFS out of which Rs 1,913 crore is classified as NPA with a provision of 25 per cent.
The remaining Rs 617 crore, including Rs 529 crore
exposure to the maritime companies of the infrastructure group, is still considered as standard and is hence being provided at 15 per
cent.
Operationally, however, the bank did well with loan book increasing 42 per cent and net interest income (NII) grew 41 per cent, led by
an identical growth in the bank’s loan book.
The bank’s stock rose 8 per cent as investors welcomed the appointment of new CEO Ravneet
Gill who will take over from March 1
Yes Bank had to appoint a new CEO after promoter CEO Rana Kapoor was denied an extension by the RBI last year.
The bank’s board will meet
on January 29 to consider a transitory arrangement in February until Gill takes over from March 1.
The bank’s board also appointed two
additional directors on its board, replacing Vasant Gujarathi and R Chandrashekhar, both of whom had quit the bank in November
Former additional chief secretary of Gujarat Maheswar Sahu and former chief information officer at HDFC Bank Anil Jaggia have been appointed
