Yes Bank falls below FPO price, profit drops 60%


(Representative image)

MUMBAI: Shares of Yes Bank fell below the follow-on public offer (FPO) price of Rs 12 on the day when the bank reported a 60% year on year drop in net profit to Rs 45 crore. On the positive front, the bank’s deposit rose 11.4% from the preceding quarter to Rs 1,17,360 crore.
Announcing the results the bank’s MD & CEO, Prashant Kumar said that the following the FPO the bank was adequately capitalized. He said that the bank had appointed a consultant to advise the bank on carving out its bad loans into a separate entity and based on the recommendations the bank would seek permissions from the regulator.
The bank set aside Rs 1,087 crore as provisions for possible defaults in the first quarter of which Rs 642 crore is for COVID-19 related provisioning.
Following the improvement in deposits, the bank has repaid Rs 25,000 crore (50%) of the special liquidity facility that the bank had availed from the Reserve Bank of India as part of its resolution package. The results marked the bank’s return to profitability after four quarters of losses due to mounting bad loans. According to Kumar, the bank has provided for all the bad loans and its provision coverage ratio at 75% was at par with other banks.
At the end of the quarter ratio of net non-performing assets improved to 4.9% from 5% last quarter. The stock of gross non-performing assets also shrunk from Rs 32,878 crore to Rs 32,703 crore. However, the ratio of gross NPAs rose marginally due to net advances shrinking.
Year-on-year basis deposits were sharply down 48% from Rs 2,25,902 crore. This was because of the run in deposits during the fourth quarter which led to the crisis and takeover by new SBI led investors.



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