Dampened by elevated loss provisions and decrease in Net Interest Income(NII), Yes Bank posted a higher than expected loss of Rs.3,787.75 crore for the quarter ending in March’21. Year ago, the loss of the last quarter stood at Rs.3,668.33 crore. Furthermore, NII plunged 22.5% to Rs.986.7 crore during the quarter in comparison to Rs.1,273.70 crore in the year-ago quarter.
Yes Bank said, “FY 21 was the year of rebuilding the foundation of YES BANK. Bank demonstrated significant improvement in performance across key indicators despite severe headwinds of Covid-19 & moratorium imposed on the bank in Mar’20″.
RBI on 5th March 2020 had placed Yes Bank under a moratorium wherein the Central Bank took charge of the YES Bank board imposing withdrawal limit on bank accounts till 3rd April 2020.
As per the Supreme Court Judgement & RBI Circular dated April 7, 2021, as per the extant IRAC norms, the Bank has classified the borrowers and hence gross slippages at the end of fourth quarter stood at Rs.11,873 crore.
Yes Bank quoted, “Despite elevated slippages, the bank has prudently made accelerated provisioning reflected in the Provision Coverage Ratio (PCR) for NPA at 79%and PCR for NPI at around 92 percent, resulting into a net loss of Rs.3,788 crore”.
The Lender further said, ”Proactive provisioning of around Rs.250 crore towards COVID-19 related restructuring (around Rs.2,500 crore) is expected to be implemented in Q1FY22”.
CEO of Yes Bank, Prashant Kumar said during the press conference, “The bank has a minimum cash recovery target of Rs.5,000 crore for FY22”. It has been a year since the reconstruction & the pandemic. We had to solve liquidity, governance, risk culture, growth and trust during the year.
“The slippages going forward would be less than our cash recovery in FY22,” said Kumar.
Kumar in the conference stated that the Bank made cash recovery of Rs.4,933 crore during the year from stressed assets, and will sustain growth in FY22 while maintaining comfortable capital buffers. He supplemented further by saying, “The bank has a minimum cash recovery target of Rs.5,000 crore for FY22”.
The CEO further added, “YES Bank had a choice to make minimum provision on slippage, but it opted for making higher provision. And we have made 10 percent upfront provision for restructured accounts. Bulk of the slippages are due to COVID hit.”
The Crisis hit bank further was hit with the jolt by NNPA’s ( net non-performing assets) rising 184 bps sequentially to 5.88 percent, while there was 5 bps sequential increase in gross NPAs.