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YES Bank posts second-biggest quarterly loss; key Q2 takeaways

The private lender reported a loss of Rs 600.08 crore for the September quarter.

Nov 01, 2019, 07.40 PM IST
YES Bank missed Street estimates on Friday and posted its second-biggest quarterly loss on deferred tax asset (DTA) impact.

The private lender reported a loss of Rs 600.08 crore for the September quarter due to a one-off DTA adjustment of Rs 709 crore on account of change in corporate tax rate regime.

Net interest income (NII) came in at Rs 2,186 crore for the September quarter, which included impact of Rs 228 crore due to fresh slippages. NIM stood at 2.7 per cent. Non-interest income stood at Rs 946 crore.

Gross slippages for the quarter stood at Rs 5,945 crore. Recoveries and upgrades aggregated to Rs 867 crore.

Here are key takeaways YES Bank’s September quarter earnings:

Second-biggest loss ever
This was the second-biggest quarterly loss for the bank since its listing after Rs 1,506.60 crore loss in March quarter this year. The lender had posted Rs 964.70 crore profit in the corresponding quarter last year.

Asset quality nosedives
Gross non-performing assets (NPA) for the September quarter stood at 7.39 per cent against 5.01 per cent on a sequential basis. Net NPA came in at 4.35 per cent against 2.91 per cent in the June quarter. The company, however, said that the recognition cycle of stressed assets was nearing an end.

Provision coverage ratio declined to 43.1 per cent from 47.8 per cent a year-ago.

Corporate revenue tanks
Company earnings were affected largely due to slump in corporate business. Revenue from corporate lending fell to Rs 4,741 crore from Rs 5,721 crore, registering a fall of 17 per cent YoY. Retail and treasury businesses advanced in the quarter. The total revenue from all segments fell to 9,281.86 crore from 9,448.50 crore year-ago. The bank earmarked Rs 1,336 crore provisions for the quarter.

Taxes dent profit
Due to the recalculation of taxes as per the new corporate tax rate, it incurred in one-time additional charge of Rs 708.61 crore. Without the tax effect, the profit would have been Rs 109 crore.

CASA improves, corporate business trims
Total assets of the bank was at Rs 3,46,576 crore with advances at Rs 2,24,505 crore. CASA ratio improved to 30.8 per cent in Q2FY20 against 30.2 per cent in Q1FY20.

YES Bank’s focus is shifting to retail business as the share of corporate banking decreased to 61.9 per cent from 98.2 per cent in September quarter last year. Conversely, retail business now contributes 38.1 per cent to bank’s revenue, up from 31.8 per cent a year ago.
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