Yes Bank Ltd shares dropped nearly 20% in early trade on Thursday, i.e. 18 July, after the bank said net profit dropped 91% to Rs 113.76 crore in the June quarter due to higher provisioning. The bank had reported a profit of Rs 1,260.36 crore in the year-ago June quarter and a loss of Rs 1,507 crore in the preceding March quarter.
Shares of Yes Bank were trading at Rs 89, down 9.6%, on BSE after hitting an intra-day low of Rs 79.15. The stock had fallen 5.2% in the previous trading session as well and is down nearly 47% so far in 2019.
Yes Bank’s asset quality continued to deteriorate. Gross non-performing assets as a percentage of gross advances for the June quarter spiked to 5.01% against 1.31% in the year-ago period and 3.22% in the March quarter.
The bank said it reported gross slippages at Rs 6,232 crore during the June quarter. However, the only positive was that that the bank had already identified these stressed loans at the end of the previous quarter and was prepared for it. “Net corporate slippages were entirely from the accounts classified as BB and below at end of Q4FY19 (March quarter),” the bank said in its results statement.
Yes Bank’s earnings were weighed down by a near three-fold jump in total provisions to Rs 1,784.1 crore during the June quarter compared with Rs 625.70 crore in the same quarter last year. However, it was down from the Rs 3,661.70 crore of provisions made in the March quarter.
On the operations side, net interest income (NII) increased by a tepid 2.78% year-on-year to Rs 2,280.84 crore during the June quarter, with muted loan growth of 10.1%. However, when compared with the previous March quarter, NII and loan book both dropped 9% and 2.2%.
Net interest margin contracted to 2.8% in the quarter ended June, down 50 basis points compared with a year ago and 30 basis points sequentially. Other income, which includes core fee income, dropped 25% year-on-year to Rs 1,272.66 crore.
Yes Bank’s management said: “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 continues to reinforce its Digital leadership and continues to win marquee mandates on the back of it.”
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