Monday, October 30, 2017

Yes Bank cuts bad loans unearthed by RBI to a fifth!



Reports 25.1% rise in Q2 net as gross NPAs double to Rs 2,720 crore
ON GROWTH TRACK

·       The gross advances of the bank grew 34.9% led by a robust growth in retail and corporate advances

·       NIL for the Quarter rose 33.5% to Rs 18,885 crore.  The fees and commissions rose 35.4% to Rs 1,248 crore


Mumbai: Yes bank on Thrusday said it has addressed the issue of non-performing assets (NPAs) raised by a Reserve Bank of India (RBI) audit, which showed the bank had under-reported its NPAs by Rs. 6,355 crore for 2016-17.
The bank said it has undertaken upgrades sale to asset reconstruction companies (ARCs) and downgraded the accounts by setting aside adequate provisions to buffer the loans it was confident of recovering.


On Thursday, YES Bank share rose 1.24% to close at Rs 331.70 on the BSE. The management in an analyst call said about Rs. 2,986 crore of the Rs. 6,355 crore is upgraded from March to date with an approval of the Board and statutory auditors, while another Rs. 1715.85 crore has been repaid about Rs. 440 crore of loans in this pool have been sold to ARCs.

After the upgrades and selling off loans, the divergence has now come down to Rs. 1,200 crore, according to the management. Higher under-reporting also forced the bank to hike its provisions to Rs. 443 crore during the quarter, much higher than the Rs. 250 crore of provisioning it normally does during a quarter.

The divergence reported in 2016-17 is also higher than the divergence reported in 2015-16 when RBI had redflagged Rs. 4,925.6 crore of loans as NPAs when the bank had reported gross NPAs of Rs. 748.9 crore.

Rana Kapoor, Managing director and chief executive officer, YES Bank told analysts in the concall, “Over the past two quarters, the amount of loans picked by the regulator have either been repaid or recognized by the bank. The entire impact of the divergence is absorbed in the second quarter despite the RBI giving us the audit report just a few days back. That is 81% of the exposure is either repaid, resolved or sold.”

Gorss NPAs doubled to ts. 2,720.34 crore, which is 1.82%  of the gross advances of the bank. This compares to 0.92% as of the end of june quarter and 0.39% in the year ago quarter.

Despite the substantial divergence and rise in NPAs YES bank reported a 25.1% rise in net profit to Rs. 1,003 crore on the back of robust growth in advances and also its other income and net interest imcome. This is the first time that the bank is reporting a four-digit net profit in its 12 years of existence.

However, the asset quality continues to haunt the bank. The high growth in profit helped the bank raise provisions for the NPAs.


The gross advances of the bank grew 34.9% to Rs. 148,675.3 crore, led by a robust growth in retail and corporate advances. Net interest income (NII) for the quarter rose 33.5% to Rs. 18,885 crore.

***
Disclaimer: The article & images used in this blog are the property of pr24x7 & the data is compiled by them.

No comments:

Post a Comment