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Bad loans rise for Yes Bank, posts net profit of ₹151 crore in Q3FY21

Yes Bank Ltd posted a net profit of ₹151 crore during the third quarter of the current financial year compared to a net loss of ₹18,560 crore in Q3FY20. Around ₹8,300 crore worth of loans on the banks’ books have not been classified as non-performing assets (NPAs) pending a Supreme Court verdict in Gajendra Sharma vs Union of India, the bank said in its financial results and investor presentation.

Around ₹5,132 crore worth of loans not recognised as NPAs belong to corporates, ₹1,224 crore are retail loans and over ₹700 crore were loans to small-medium-enterprises, the bank said in its investor presentation. Further, around ₹6,537 crore worth of loans are overdue by 61 to 90 days, the bank said.

Prashant Kumar, managing director and chief executive officer, Yes Bank says that if the Supreme Court does not issue a verdict by March 31 this year, the bank will be able to increase its cash recoveries, but if it does, the banks’ gross NPA figure will increase by ₹8,300 crore which translates to 4.5% of the lenders’ existing loan book. As of December 31, 2020, the banks’ GNPA ratio stood at 15.36%, which means on a proforma basis the GNPA would rise to over 20% if these default accounts were recognised, Kumar said during a media interaction on Friday.

“The proforma numbers are looking large as compared to where we were in March 2020, because we have reduced our loan book in the last few quarters. We believe that the Covid-related provisions that we hold should be enough to cover any losses,” Kumar said.

Yes Bank has invoked the Reserve Bank of India’s one-time restructuring scheme for COVID-19 related stress on ₹8,062 crore worth of loans. “Credit growth on retail will be 20%, for SMEs it will be 15% and corporate loans will be 10% for the next financial year. If you aggregate all, the credit growth going forward will be at 12%,” Kumar said.

Operational highlights

The bank opened over 220,000 new CASA accounts during the quarter, although its overall CASA ratio has fallen to 26% in Q3FY21 from 32.1% in Q3 FY20. Total deposits grew by 12% YoY to ₹1.46 lakh crore at the end of Q3FY21, of which CASA deposits stood at ₹37,973 crore and term deposits at ₹1.08 lakh crore.

Total advances of the bank grew by 9% YoY to ₹1.69 lakh crore as of Q3FY21 of which corporate advances stood at ₹88,634 crore and retail advances at ₹47,115 crore. The bank disbursed close to ₹12,000 crore worth of loans during the quarter compared to nearly half in the previous quarter. Around ₹11,917 crore went to retail and SME borrowers and around ₹2,000 crore to corproates.

  • Gross NPA: 15.36% in Q3FY21 compared to 16.9% in Q2FY21 and 16.8% in Q3FY20
  • Net NPA: 4.05% in Q3FY21 compared to 4.71% in Q2FY21 and 5.03% in Q3FY20
  • Total COVID-19 related provisions: ₹2,683 crore
  • Total cash recoveries: ₹2,973 crore between April and December 2020
On Friday, the bank’s board approved to raise ₹10,000 crore through various instruments like share sale, depository receipts, convertible debentures, bonds, amongst others.

Digital banking highlights

  • Net Banking: over 1.9 million users processing ₹66,004 crore transactions
  • Mobile Banking: 1.7 million users processing ₹26,215 crore transactions
  • UPI: over 40% market share

Financial Snapshot

  • Net interest income: ₹2,560 crore , up by 30% QoQ and 140% YoY
  • Net interest margin: 3.4% in Q3FY21 compared to 1.4% in Q3FY20
  • Non-interest income: ₹1,197 crore, up by 69% QoQ and 91% YoY
  • Operating Expenses: ₹1,472 crore, up by 12% QoQ and down by 13% YoY
  • Operating Profit: ₹2,286 crore, up by 58% QoQ. In Q3FY20 the bank had a operating loss of ₹6 crore

Also read

Download: Financials and Investor Presentation

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