Yes Bank Ltd missed second-quarter profit estimates by a wide berth on Thursday as provisions for bad loans and mark-to-market losses more than doubled, exacerbating woes at the bank in search of a new CEO.
Net profit came in at Rs 965 crore in the quarter ended September 30, compared with Rs 1,003 crore a year earlier and short of analysts' average estimate of Rs 1,282 crore.
Sharing his outlook, Rajat Monga, senior group president-financial markets of Yes Bank, said, “IL&FS continues to be our standard account and we don’t have loan to the holding company. So the loans that we have in the group is all into their downstream including their SPVs. So the assessment of asset quality has to be done on the basis of the performance of debt servicing and also on the collateral values that exist in the loan. So IL&FS anyway is going through its own process of resolution. So it is a good idea to watch for what the new board is going to do in terms of taking next steps."
“The exposures are all to specific projects ... they are to the underlying assets which have land and we give construction financing to those projects. There would be one and a half to two and a half times cover depending upon project to project. These are ring-fenced exposures which means that if the project is being completed, our loan will be repaid as the project gets sold. So if you look at our exposure about real estate, about 80 percent is to residential and 20 percent is to commercial,” he added.
Monga further mentioned that the loan growth for the financial year 2019 will be between 30 percent and 40 percent.