RBI rap: Yes Bank denies any wrong-doing

Days after RBI pulled up Yes Bank for making a report marked 'confidential' public, the private lender put up a stout defence, saying the NPA divergence information was in due compliance. 

"The bank in its assessment was of the view that the disclosure pertaining to divergence was a UPSI and required prompt dissemination to the Stock Exchanges in order to ensure compliance with Sebi (PIT) Regulations and the NSE & BSE circulars," Yes Bank said in a regulatory filing to the NSE. 

The bank said it divulged the RBI report to ensure information symmetry. 

"Immediately on receipt of the RAR report, to mitigate and to avoid any further speculation, misuse or leakage of the UPSI, it was decided to disseminate the information regarding "Divergence" to the stock exchanges, so as to ensure information parity, instead of withholding this information till finalization of the Annual Results," the bank further stated. 

The bank "has not made any undue advantage or benefit by disseminating the UPSI. Hence, we humbly submit that the bank has not misrepresented or misled the stock exchanges/ investors in terms of Regulation 4(1)(c) of Listing Regulations". 

UPSI stands for Unpublished Price Sensitive Information. 

YES Bank had earlier informed stock exchanges that the RBI has not found any divergence in the asset classification and provisioning done by the lender during 2017-18. 

But RBI has maintained that ‘nil’ divergence is not an achievement to be published and is only compliance with the extant Income Recognition and Asset Classification norms. 

The regulator also pointed out that its Risk Assessment Report (RAR) identified several other lapses and regulatory breaches in various areas of the bank's functioning and the disclosure of just one part of the RAR is viewed as a deliberate attempt to mislead the public. 

However, the RBI’s harsh view of Yes Bank’s move has confused lenders on whether it is a good practice to disclose NPA divergence, even though regulatory guidelines make it compulsory to disclose it in their notes to accounts.  

Source- Economic Times

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Yes Bank find new CEO to replace Rana Kapoor

Ranveet Singh Gill, the veteran banker has been appointed as the new MD and CEO of Yes Bank.

Yes, Bank also received approval from RBI for the tenure of its current MD&CEO till January 31, 2019, and for appointing a successor by February 01, 2019.

Yes, Bank said in a statement, “The Bank has received RBI approval for its new MD & CEO, Mr Ravneet Singh Gill for him to join on or before March 1, 2019."

Mr Gill, currently the chief of Deutsche Bank’s India operations, will replace Rana Kapoor. Gill joined Deutsche Bank in 1991 and has worked across different businesses including corporate banking, capital markets and wealth management.

In September last year, RBI had asked Rana Kapoor, Managing Director & CEO of Yes Bank, to step down by the end of January, sending its stock plunging and causing several resignations from its board. The central bank had asked the lender to find a new CEO by February 1.

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YES Bank Q3 net profit falls 7%

YES Bank on Thursday reported a 6.9 per cent YoY fall in its net profit at Rs 1,001.85 crore for third quarter (October-December) of FY19. It had posted PAT of Rs 1,076.87 crore in the year-ago period. Sequentially, the figures grew 3.9 per cent. 

Total deposits grew 29.7 per cent YoY to Rs 222,758 crores. 

GNPA (Gross non performing assets) improved sequentially to 1.32 per cent from 1.60 per cent last quarter, NNPA improved to 0.59 per cent from 0.84 per cent last quarter and PCR improved to 55.6 per cent from 47.8 per cent, it said in its press release. 

Exposure to Il&FS group stood at Rs 2,530 crore. NII grew 41.2 per cent YoY to Rs 2,666.4 crore; sequentially it grew at 10.3 per cent; NIMs (net interest margins) were stable at 3.3 per cent, the company said. 

YES Bank has once again delivered satisfactory performance across income growth, margins, profitability and Capital accretion, despite the recognition and provision impact from a stressed Infrastructure conglomerate. Retail Assets growth momentum continues, while growth in corporate business segments has been rebalanced after witnessing strong market share driven growth over the last few preceding quarters," said Rana Kapoor, Managing Director & CEO, YES Bank.

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Yes Bank Q2 profit falls 4%

Yes Bank Ltd on Thursday reported a 3.8% decline in its September quarter as bad loans continued to mount and provisions soared.

The bank reported Rs2620.69 crore exposure to troubled Infrastructure Leasing & Financial Services Ltd as of September 2018.

Net profit for the quarter stood at Rs964.70 crore against Rs1002.73 crore a year ago. According to 18 Bloomberg analyst estiamtes, the bank was expected to post a profit of Rs1,273.80 crore.

Provisions and contingencies soared 110.26% to Rs939.98 crore in the quarter from Rs447.06 crore a year ago. On a quarter-on-quarter basis, they surged 50.2% from Rs625.65 crore. Other operating expenses jumped 40.1% to Rs930.59 crore.

Net interest income (NII), or the core income a bank earns by giving loans, was up 28.25% to Rs2,417.55 crore versus Rs1,885.09 crore last year. Other income was at Rs1,473.45 crore, up 18% from Rs1,248.44 crore a year ago.

Gross non-performing assets (NPAs) was up 42% to Rs3,866.08 crore at the end of the September quarter from Rs2,720.34 crore in the same quarter last year.

As a percentage of total loans, gross NPAs fell to 1.6% as compared with 1.82% in the year-ago quarter. Net NPAs were at 0.84% against 1.04% a year ago.

Advances for the quarter grew 61.2% to Rs2.40 trillion while deposits rose 41.05% to Rs2.23 trillion.

Recently Yes Bank reported to exchanges that Reserve Bank of India denied a three-year extension to its chief executive officer Rana Kapoor and asked him to step down after 31 January 2019.

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IL&FS lenders looking at a 10-15% haircut; BoI, SBI, PNB & Yes Bank staring at a hit: Report

Lenders to the beleaguered IL&FS group are looking at a 10-15 percent haircut in many of its projects as buyers will bargain hard, The Economic Times reports. A group of banks, led by Bank of India (BoI) and State Bank of India (SBI), have lent IL&FS Rs 34,480 crore, which is a part of its consolidated debt of Rs 91,000 crore.

BoI has the highest exposure to the debt-ridden firm with loans of Rs 2,388 crore, followed by SBI at Rs 2,140 crore and Punjab National Bank at Rs 1,859 crore. Yes Bank has the largest exposure within private sector banks, with loans worth Rs 1,841 crore, as per a Kotak Institutional Equities report.

Experts believe the Centre’s decision to overhaul the company’s board and appoint a new, six-member team led by Uday Kotak, has improved the lenders’ chances of recuperating their money, but haircuts are unavoidable, the report said.

The loans will be restructured and the asset monetisation process will lead to a delay in payments, Abizer Diwanji, Partner, Financial Services at EY, told the paper. “You also have to consider the mark-to-market losses on these loans. It is fair to assume some haircuts for lenders in the short term,” he added.

The National Company Law Tribunal (NCLT) has ordered the newly-formed board to meet on or before October 8. The board is yet to come up with a financial plan which will include monetising some assets and restructuring loans.

A banker with a UK-based bank which has an exposure of about Rs 200 crore told the paper that they are confident of recovery, now that the government has stepped it. They also deemed it premature to assume a haircut at present as government intervention has boosted creditor confidence.

Others in the banking industry said open projects on the ground which can be monetised give the lenders confidence. Calling it a short term liquidity issue, bankers think this problem can be resolved through capital infusion and loans by government-backed entities. Also, there are many interested parties for IL&FS’ roads, power and energy-linked projects.

“Once the liquidity issue is resolved, the board will get more time and they can take a few months to a year to offload some projects,” a banking official told the paper.

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Yes Bank Q1 profit jumps 31% with robust loan growth

Private sector lender Yes Bank started off the year 2018-19 on a strong note with profit growth of 31 percent in June quarter but asset quality weakened.

Profit for the quarter stood at Rs 1,260.4 crore, which increased from Rs 965.52 crore in corresponding period last fiscal. The profitability was driven by NII, other income and operating income but higher provisions limited growth.

Net interest income during the quarter grew by 23 percent year-on-year to Rs 2,219.14 crore with robust loan growth of 53.4 percent but net interest margin contracted to 3.3 percent (from 3.7 percent in Q1FY18 and 3.4 percent in Q4FY18).

"Advances grew by 53.4 percent YoY to Rs 2,14,720.1 crore on the back of robust growth across corporate, IBU, MSME and retail businesses. Retail banking advances grew by 105.2 percent YoY to 14 percent of Advances (up from 10.5 percent as on June 30, 2017)," the bank said.

Deposits during the quarter rose 42 percent YoY to Rs 2,13,394.5 crore with CASA ratio at 35.1 percent on the back of 35.7 percent YoY growth. "Saving account deposits at Rs 46,597.5 crore) and current account deposits (Rs 28,332.5 crore) posted strong growth of 26.9 percent and 53.1 percent YoY respectively," the bank said.

Other income (non-interest income) shot up 50 percent to Rs 1,694 crore and operating profit surged 44 percent to Rs 2,455 crore compared to same quarter last year. Tax expenses spiked 26 percent to Rs 568.7 crore YoY. Asset quality weakened for the quarter ended June 2018 with gross non-performing assets (NPA) rising to 1.31 percent against 1.28 percent in previous quarter, though net NPA was lower at 0.59 percent versus 0.64 percent sequentially.

In absolute term, gross NPA increased 8 percent quarter-on-quarter to Rs 2,824.5 crore while net NPA declined 4 percent to Rs 1,262.6 crore QoQ. Slippages for the quarter stood at Rs 560 crore, which increased compared to Rs 380.2 crore reported in the previous quarter. Out of which Rs 314.8 crore is expected to be fully recovered before September 2018 (supported by liquid/marketable securities), the bank said.

Total stressed book (NNPA + net security receipts + standard restructured exposure) declined steadily to 1.52 percent (Rs 3,283 crore from 1.73 percent (Rs 3,535 crore) sequentially.

The bank has not sold any loans to asset reconstruction companies in the quarter. "During the quarter one security receipt investment with carrying value of Rs 103.1 crore was fully redeemed in line with bank’s expectation of redemptions/ recoveries of 30-40 percent during FY19."

Standard restructured exposure for the quarter stood at Rs 249.4 crore, declined compared to Rs 337.6 crore in the March quarter. Yes Bank said out of exposure to NCLT (National Company Law Tribunal) list 1 accounts (which is only 0.01 percent of gross advances), it has recovered Rs 184 crore from one account. Consequently, it has residual exposure to only one account with an exposure of Rs 23.4 crore (funded exposure only), classified as NPA and provisioning coverage of 50 percent. "We expect to fully recover this exposure."

Under NCLT list 2 accounts (which is 0.31 percent of gross advances), its total exposure stood at Rs 654.7 crore across 7 accounts. Out of which entire funded exposure aggregating to Rs 568 crore (across 3 accounts), is classified as NPA and has provision coverage of 43 percent, it said.

Provisions and contingencies spiked 57 percent quarter-on-quarter (119 percent year-on-year) to Rs 625.6 crore for the quarter ended June. Provision coverage ratio improved to 55.3 percent from 50 percent sequentially, but declined compared to 60 percent in June 2017.

"Provisions stood at Rs 625.7 crore of which Rs 379.9 crore is NPA provisioning which includes Rs 149.0 crore towards increase in provision coverage to 55.3 percent and Rs 92.7 crore is towards MTM losses on Bonds. MTM losses of Rs 278.0 crore will be amortized during FY19 under the RBI dispensation," the bank reasoned.

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Yes Bank Q4 result, profit rises 29%

Yes Bank Ltd on Thursday reported a 29% jump in its March quarter net profit due to higher net interest income and other income.

Net profit for the quarter stood at Rs1,179.44 crore against Rs914.12 crore a year ago. According to 21 Bloomberg analysts’ estimates, the bank was expected to post a profit of Rs1,085.40 crore.

Net interest income (NII), or the core income a bank earns by giving loans, increased 31.4% to Rs2,154.24 crore as against Rs1,639.70 crore last year. Other income was at Rs1,420.97 crore, up 0.13% from Rs1,257.39 crore a year ago.

Provisions and contingencies rose 29% to Rs399.64 crore in the quarter from Rs309.73 crore a year ago. On a quarter-on-quarter basis, they fell 5.16% from Rs421.32 crore.

The divergence in gross bad loans, the difference between Reserve Bank of India’s assessment and that reported by the lender, stood at around Rs6,355.20 crore at end March 2018, while divergence in provisions was at Rs1,535.90 crore.

Yes Bank’s gross non-performing assets (NPAs) as assessed by the Reserve Bank of India (RBI) stood at Rs8,373.80 crore as of March 2017, the bank said. It had reported gross NPAs of Rs2,018.60 crore as on March 2017. Gross non-performing assets (NPAs) advanced 30.13% to Rs2,626.80 crore at the end of the March quarter.

However, the bank said the net impact of fiscal year 2017 diversion has been duly reflected in FY18 earnings. The bank also said that it has recognized the entire net mark to mark loss on investments in respective quarters.

As a percentage of total loans, gross NPAs stood at 1.28% as compared to 1.72% in the previous quarter and 1.52% in the year-ago quarter. Net NPAs were at 0.64% in the March quarter compared to 0.93% in the previous quarter and 0.81% in the same quarter last year.

Advances for the quarter rose 53.9% from a year ago to Rs 2.04 trillion while deposits gained 40.5% to Rs 2.01 trillion.

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Yes Bank Q3 profit rise by 22%

Yes Bank on Thursday reported a 22% rise in its fiscal-third quarter profit on higher net interest income and other income.

Net profit rose to Rs1076.87 crore for the quarter ended 31 December from Rs882.63 crore a year ago. According to Bloomberg survey of 15 analysts, the bank was expected to post a profit of Rs 1,075.50 crore.

Net interest income (NII) or the core income a bank earns by giving loans increased 26.8% to Rs1888.80 crore compared with Rs1489.33 crore last year. Other income was at Rs1422.26 crore, up 39.91% from Rs1016.52 crore a year ago.

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