Yes Bank expects bad loan troubles to persist

Gold imports fell 8.86 per cent to $27 billion (about Rs 1.90 lakh crore) during the AprilFebruary period of this financial year. Commerce ministry data shows imports of the yellow metal stood at $29.62 bn in the corresponding period of 201819. The decline in gold imports has helped in narrowing the country's trade deficit to

$143.12 billion during AprilFebruary from $173 billion a year ago.

New Delhi, March 15: Troubled Yes Bank expects pressures from sour loans to continue through FY21, even as yet one more private lender, IDFC First Bank, said it will by equities worth Rs 250 crore in beleaguered bank.

Yes Bank on Saturday declared the highest loss for any private sector lender at Rs 18,654 crore for the December quarter.

The bank's administrator and CEO-designate Prashant Kumar is confident of the bank's survival after a Rs 10,000-crore capital infusion.

The bank witnessed withdrawals of over Rs 72,000 crore of deposits in the last six months to Rs 1.37 lakh crore, but the Rs 10,000 crore capital infusion, coupled with over 1,000 branches and a strong customer base makes Kumar confident of Yes Bank continuing to be a "going concern".

"The proposed capital infusion and the bank's strong customer base and branch network will enable the Bank to continue its business for the foreseeable future, so as to be able to realise its assets and discharge its liabilities in its normal course of business," the bank said, quoting Kumar's assessment. In its investor presentation, Yes Bank said slippages, which went up to Rs

24,587 crore in the December quarter, will normalise only in FY22.

The bank told investors that it expects slippages to be at 5 per cent of the assets in FY21. The assets decreased by 22 per cent to Rs 2.90 lakh crore at the end of December 2019, as compared to the year-ago period.

Compared to the preceding quarter, advances overdue for 31 to 90 days (levels before they get tagged as NPAs), declined 43 per cent to Rs 13,911 crore.

The higher slippages and a reduction in loan book were key reasons for the 60 per cent decline in the core net interest income at Rs

1,065 crore, and also narrowing of the net interest margin to 1.4 per cent from

3.3 per cent a year ago. In a stock exchange filing, IDFC First Bank said, "duly authorised committee of the board of directors" had at its meeting on March 14, "approval for an equity investment of upto Rs 250 crore comprising upto 25 crore equity shares at a price of Rs 10 each and face value of Rs 2 each, under the proposed Scheme of Reconstruction of Yes Bank Ltd."

Earlier on Saturday, Federal Bank had committed to invest Rs 300 crore in Yes Bank.

Apart from IDFC, ICICI Bank will invest Rs 1,000 crore, HDFC Rs 1,000 crore, Axis Bank Rs 600 crore, Kotak Mahindra Bank Rs

500 crore, Bandhan Bank and Federal Bank Rs 300 crore each in Yes Bank.