Yes Bank reports Rs 18,564 crore loss in Q3FY20

YES Bank has reported a staggering Rs 18,564-crore loss for the December quarter financial year 2019-20 (FY20) against a profit of Rs 1000 crore a year ago. It reported a loss due to higher recognition of dead assets on the books and erosion of capital buffers to the brink.

It had reported a loss of Rs 629 crore in the September quarter.

The gross non-performing assets (NPA) shot-up to Rs 40,709 crore or 18.87 per cent of assets as of December 31, 2019, up from the preceding September quarter's Rs 17,134 crore or 7.39 per cent. Such loans were at Rs 5158 crore a year ago. The bank's net NPA ratio was at 5.97 per cent.

This forced the bank to set aside Rs 24,765 crore as provisions for the expected reverses and eroded the bottom-line.

YES bank witnessed significant erosion in its capital with common equity tier 1 or the CET ratio coming in at 0.6 per cent against a regulatory minimum of 7.375 per cent. The bank also reported a capital adequacy ratio at 4.2 per cent, this number was 16.4 per cent a year ago and 16.3 per cent in the September quarter.

The bank also reported a significant drop in its deposits. The bank disclosed that there had been an over Rs 44,000-crore dip in its deposits between September and December to Rs 1,65,000 crore, while there has been a sharp decline in interest earned, suggesting a dip in advances due to the lack of capital. It also lost deposits worth Rs 3,000 crore in the fourth quarter, which forced it to breach its minimum requirement of the cash reserve ratio and statutory liquidity requirement. Its deposits currently stand at Rs 1.37 lakh crore.

The bank's board was earlier superseded by the government on March 5, 2020, and former chief financial officer of SBI, Prashant Kumar, was appointed as the administrator of the bank by the RBI.

The board was superseded citing the bank's inability to raise capital as the primary reason for the actions. This also included putting the bank under a moratorium and a slew of restrictions, including capping of withdrawals at Rs 50,000 per account for a month.