NPA assessment: Yes Bank, RBI rating gap Rs 6,000 cr

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Mumbai | Published: October 27, 2017 3:39:49 AM

Private-sector lender Yes Bank on Thursday reported a sharp increase in its non-performing assets for the July-September quarter after the Reserve Bank of India directed the lender to reclassify more assets as NPAs as on March 31, 2017.

Yes Bank, Reserve Bank of India, NPAs, Annual Risk Based Supervision, CASA ratio The increase in NPA and consequent provision is in conformity with RBI’s Annual Risk Based Supervision (RBS) exercise conducted for FY2017 (finalised in October 2017). (PTI)

Private-sector lender Yes Bank on Thursday reported a sharp increase in its non-performing assets for the July-September quarter after the Reserve Bank of India directed the lender to reclassify more assets as NPAs as on March 31, 2017.The bank’s net profit for the July-September quarter stood at Rs 1,002.73 crore, up 25.1% from the corresponding quarter last year. On a sequential basis, net profit grew 3.9%. Total income grew by 21.4% from the year-ago period to Rs 6,048.78 crore. The divergence in gross NPA between the RBI’s assessment and as reported by Yes Bank as on March 31, 2017 was Rs 6,355.20 crore, while the divergence in net NPAs was Rs 4,819.40 crore, the bank said in its second quarter earnings statement. Yes Bank’s gross NPA jumped to 1.82% from 0.83% in the year-ago period. Net NPA increased to 1.04% from 0.29% in the corresponding period last year. “

The increase in NPA and consequent provision is in conformity with RBI’s Annual Risk Based Supervision (RBS) exercise conducted for FY2017 (finalised in October 2017). The bank has fully absorbed the impact of such re-classifications in the results for Q2FY18,” Yes Bank said. The provision coverage ratio dropped to 43.3% during the quarter from 64.8% in the year-ago period and 60% in the previous quarter. Yes Bank said that out of the total divergence of Rs 6,355.20 crore, only 19.2% is classified as NPA as of September 30. The rest has been either repaid, upgraded as standard or sold to asset reconstruction companies. During the quarter, the bank’s net interest income, the difference between interest earned and interest expended, grew 33.5% to Rs 1,885.09 crore from the year-ago period.

On a sequential basis, the net interest income grew 4.2%. It’s net interest margin expanded to 3.7% from 3.4% in the year-ago period. It has remained unchanged from the previous quarter. “The bank’s retail banking advances have posted robust growth of 78% y-o-y to 11.4% of outstanding book and sustained momentum in CASA accretion gives us the confidence to achieve our target CASA ratio of 40% by September 2018, well ahead of our earlier target date of March 2020,” said Rana Kapoor, managing director & CEO, Yes Bank.

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