YES Bank share price rallies 11% intraday as Q4 profit beats estimates

Mae Love
April 27, 2018

Private sector lender Yes Bank today reported a rise of 29 per cent in standalone net profit at Rs 1,179.44 crore in the March quarter of 2017-18. This is the first ever quarterly loss for the private sector lender in the last 20 years. We have dissected the entire book and taken out the stressed loans. The central bank's new guidelines for resolution of stressed assets also drove the recognition in its restructured book.

The bank had logged a net profit of Rs 914.12 crore during January-March of 2016-17.

Net profit rose to 11.79 billion rupees ($176.50 million) in the quarter ended March 31, from 9.14 billion rupees a year earlier, the Mumbai-based bank said in a statement (https://www.bseindia.com/xml-data/corpfiling/AttachLive/20a2fbe3-9057-48f2-a8fb-6c71d0e8cc20.pdf) on Thursday. YES Bank also successfully completed its maiden MTN issuance of US$ 600 Mn in the past quarter to support diversified funding for this growth.

The bank's board at a meeting on Thursday recommended a dividend of Rs 2.70 per share or 135 percent per share for the year ended March 31, 2018, subject to approval of shareholders.

Net interest income of the lender remained nearly flat at Rs 4,731 crore during the quarter under review.

Total income during the quarter ended March, 2018 stood at Rs 14,500 crore, marginally up from Rs 14,181 crore previous year. Net interest margin for FY18 came in at 3.44 per cent.

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In absolute terms, gross NPAs were Rs 34,248.64 crore as on March 31, 2018, up from Rs 21,280.48 crore a year ago.

Slippages for the quarter almost quadrupled YoY to Rs 16,536 crore with almost Rs 13,900 crore of new slippages coming from the corporate sector.

The bank recorded a four-fold rise in slippages on a sequential basis to Rs 16,536 crore from Rs 4,428 crore in the third quarter of 2017-18. Most of the corporate slippages, nearly 90 per cent came from the BB book particularly the power sector The watch list is now closed and in Q4 it is (just) Rs 428 crore...

Speaking about how FY19 will play out, Sridharan said, "The new NPA formation will reduce significantly". 53 crore from Rs 2,581.25 crore in March quarter previous year.

Outgoing chief executive officer & managing director Shikha Sharma admitted placing some incorrect bets on infrastructure, particularly power, where over 40 per cent of the loan book turned toxic, while Jairam Sridharan, chief financial officer, assured that the NPA recognition cycle was finally over, the "watchlist" done and dusted and will cease to exist.

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