YES Bank Q1 profit plunges 91% to Rs 114 crore on higher provisions

Private lender YES Bank on Wednesday reported a sharp decline of 91 per cent on a yearly basis in its net profit at Rs 113.80 crore for the first quarter ended June 30, 2019, dented by one-off impact from mark to market (MTM) provisions of Rs 1,109 crore.

"The private lender posted a net profit of Rs Rs 1,260 crore in the same quarter last year," YES Bank said in a filing to the Bombay Stock Exchange.

The bank's net interest income (NII), which is the difference between interest earned and interest expended, grew by 2.8 per cent to Rs 2,281 crore in April-June quarter of FY20, affected by "impact of Rs 223 crore of interest reversals on account of slippages during the quarter".

The other income (non-interest income) fell by 24.88 per cent to Rs 1,272.66 crore against Rs 1,694.14 crore in the same period last year.

The provisions and contingencies of the bank rose nearly three times to Rs 1,784.1 crore as compared to Rs 625.70 crore made in the year-ago quarter. The bank's provisions in the March quarter stood at Rs 3,661.70 crore.

"The provision includes one-off impact of Rs 1,109 crore of investment MTM provision led by rating downgrades of investments in companies of two financial services groups," the bank said in the regulatory filing.

YES Bank's asset quality declined during June quarter, with gross non-performing assets (NPAs) ratio - bad loans as a percentage of gross advances - spiking to 5.01 per cent versus 1.31 per cent in the year-ago quarter. Net NPA expanded to 2.91 per cent during June quarter as compared to 0.59 per cent in the corresponding quarter last year.

The bank's absolute gross NPA stood at Rs 12,092.10 crore in Q1FY20 against Rs 2,824.46 crore in Q1FY19.

"This was a 'quarter of consolidation' in which the bank has demonstrated strong resilience in revenues and asset quality. We believe that earnings trajectory should strengthen significantly from here on," the bank management said.

Ahead of Q1 result, YES Bank shares closed trade at Rs 98.45 apiece, down 5.25 per cent, on the BSE on Wednesday.

Edited by Chitranjan Kumar

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