Private lender Yes Bank on Wednesday reported a 91 percent year-on-year (YoY) drop in net profit at Rs 113.8 crore for the first quarter ended June 2019.
In the corresponding quarter last year, the company posted a net profit of Rs 1,260.4 crore. CNBC-TV18 Polls had predicted a profit of Rs 149.9 crore for the quarter under review.
This is the second consecutive quarter the bank has shown a massive hit on the bottom line since the new management under Ravneet Gill took over in March after the forced exit of promoter-chief executive Rana Kapoor over governance concerns by the RBI.
The bank's fresh slippages at Rs 6,232 crore nearly doubled if compared to the Rs 3,408 crore in the previous quarter, leading the gross non-performing assets ratio to rise to 5.01 percent against 1.31 percent in the year-ago period and 2.91 percent three months ago.
The overall provisions galloped 184 percent to Rs 1,784 crore. It used Rs 1,399 crore of the Rs 2,100 crore in additional provisions made during the March quarter. The downgrade of two finance companies led to a Rs 1,109 crore hit in provisions during the reporting quarter.
The provision coverage ratio dropped to 43 percent, one of the lowest among private-sector lenders. Despite the setbacks, the bank, however, maintained its credit cost guidance at 1.25 percent for the entire year, stating that the same stood at 0.32 percent for the first quarter.
At the time of announcing results last time, the bank had said it has identified assets of over Rs 10,000 crore which led it to provide extra Rs 2,100 crore and report a maiden quarterly loss.
Later, reports had also come about watchers expressing concern over its exposure to companies like DHFL, the Anil Ambani Group companies and also the realty sector. It sold one account with an exposure of Rs 412 crore to an asset reconstruction company (ARC) during the reporting quarter.
"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 hereon," the statement said in a "management commentary" on the numbers. Its core net interest income grew by a tepid 2.8 percent to Rs 2,281 crore after absorbing losses of Rs 223 crore on NPAs during the quarter.
The loan assets grew by a slower than the system 10 percent, while the net interest margin slipped to 2.8 percent primarily on a surge in NPAs. Retail loans grew 43.3 percent and now account for 18.3 percent of the overall loans as against 14 percent in the year-ago period.
The corporate banking assets slipped 4.6 percent during the last three months, and grew 4.2 percent as compared to the year-ago period, and now form 63.9 per cent of the overall advances. The bank's overall capital adequacy slipped to 15.7 percent, while the core tier-I stood at 10.7 percent, which points towards the need to utilise the enabling provision to raise equity sooner.
The bank scrip, which has been on a slide ever since Kapoor's termination, slipped 5.25 per cent to Rs 98.45 on the BSE, as against gains of 0.22 percent on the benchmark. The results were announced after the close of markets.
(With inputs from PTI)