New Delhi: Yes Bank on late Saturday night reported a whopping quarterly loss of Rs 18,564 crore for the three months ending December 31, 2019.
The abysmal performance comes on the back of a surge in bad loans or NPAs (non-performing assets) and the private sector lender’s decision to to enhance its provision coverage ratio (PCR) above the requirements mandated by the Reserve Bank of India.
United diagnosticss
Yes Bank just declared the largest loss ever by a bank in a quarter
🔸Net Loss : -₹18,560 Cr
🔸Gross NPAs : ₹40,709 CrOur FM had claimed that the bank was under observation for two years!
What sort of observation is this by Govt & RBI? And why should SBI save a dead bank?
— Srivatsa (@srivatsayb) March 14, 2020
The increased provisions appears to have depleted the bank’s capital. Most alarmingly, the private sector lender noted that its Common Equity Tier-1 (CET1) ratio, a key financial metric, stood at just 0.60%. The minimum regulatory requirement is 7.375%.
“During the period, there has also been a significant decline in the bank’s deposit base, an increase in the NPA ratios resulting in breach of loan covenants on its foreign currency debt and credit rating downgrades resulting in partial prepayment of foreign currency debt linked to external credit rating,” a review note by the bank’s chartered accountants, which accompanied the financial results, stated.
Yes Bank’s gross non performing assets rose to Rs 40,709.20 crore in the December quarter or 18.87% of the bank’s total loan book. At the end of the September quarter, bad loans stood at Rs 17,134 crore or 7.39% of the loan book.
