MUMBAI: Yes Bank reported a 91 per cent fall in its first quarter net profit to Rs 114 crore from Rs1,260 crore reported in the corresponding period of the previous year, as provisioning for bad loans shot up substantially. The bank provided Rs 1,784 crore in the first quarter towards bad loans, out of which `1,109 crore as mark to market provision on bonds of two financial services groups, whose credit rating fell below investment grade during the quarter.
The bank’s gross non-performing loans (NPA) rose to 5.01 per cent at the end of June quarter from 1.31 per cent in the first quarter of pervious year, and higher than 3.22 per cent at the end of the March quarter. While total capital adequacy of the bank was comfortable at 15.7 per cent, Tier-I Ratio at 10.7 per cent and CET-I ratio at 8 per cent would necessitate the bank to look for fresh capital.
“This was a ‘Quarter of Consolidation’, in which the bank has demonstrated strong resilience in revenues and asset quality. We believe that earnings trajectory should strengthen significantly from here on,” Yes Bank said. The bank had told analysts at a conference call that capital-raising would be a quarter two event and that the sense of urgency to raise capital is not lost on the bank.
Yes Bank had posted a surprise loss of Rs 1,507 crore in the March quarter pulled down by the bad loan provisions. Bank’s net interest income grew 2.8 per cent on year to Rs 2,281 crore in the first quarter, which includes impact of Rs 223 crore of interest reversals on account of fresh slippages, the bank said. Consequently, the net interest margin was lower at 2.8 per cent in the June quarter this fiscal compared to 3.3 per cent a year ago, and 3.1 per cent in the March quarter.