Central bank finds Yes Bank under-reported bad loans

MUMBAI: Private sector lender Yes Bank on Tuesday said the Reserve Bank of India has found that it has under-reported bad loans by ₹3,277 crore in the year ended March 31.

Of this, ₹1,259 crore has already been classified as nonperforming as on September 30 and ₹2,018 crore is the amount of incremental bad loans, Yes Bank said. Divergence in bad loans and provisions arise when the bank’s and RBI’S assessments differ.

The bank also said the divergence in provisions was ₹978 crore as on March 31, 2019 and, since some of it has been provided for by September end, the incremental provisions are to the tune of ₹632 crore.

“The bank’s management stands irrevocably committed to ensuring the highest standards of accounting and governance transparency. This was also evidenced through the proactive measure of taking ₹2,100 crore of ‘Contingency Provision’ on exposures which were fully ‘Standard’ as on March 31, 2019,” the bank said in a regulatory filing.

Yes Bank added that in the current financial year, it has made material policy and personnel changes to ensure fullest regulatory compliance.

“The bank intends to convene a meeting of its board of directors by the end of this month to finalise its capital raise,” it added.

Yes Bank reported a net loss of ₹600 crore for the three months to September, primarily owing to a one-time deferred-tax asset (DTA) adjustment of ₹709 crore. The bank had posted a net profit of ₹965 crore in the same period last year.

Its loss was higher than ₹402 crore estimated by a Bloomberg consensus estimate of 17 analysts.

Even without DTA adjustment, the bank’s operating performance was weaker than the same period last year.

Yes Bank’s operating profit was also down 38% year-on-year (y-o-y) to ₹1,458 crore in the quarter under review.

In a separate development, Yes Bank founder Rana Kapoor virtually sold off his entire holding in the lender, according to a regulatory filing by the company on Tuesday.

Kapoor, who had earlier likened his holding in the bank to “diamonds” and vowed never to sell it, holds just 900 shares valued under ₹58,000 at Tuesday’s closing price, the bank said.

contributed to this story.