Yes Bank not out of woods, reports Rs 629 cr loss for Q2 on tax impact, NPAs

Mumbai: Troubled Yes Bank's asset quality woes seem to be far from over, as the private sector lender reported a Rs 629 crore loss for September quarter on a one time tax impact.

This is the third successive quarter after the forced removal of promoter-chief executive Rana Kapoor that the lender has showed difficulties on the bottomline.

Kapoor had to be replaced because of concerns on corporate governance and loan practices and was succeeded by Ravneet Gill.

The bank said it had to take a Rs 709 crore impact due on account of deferred tax adjustment necessitated by a shift in tax computation to a newer methodology and stressed that it would have been in black but for it. However, the gross non-performing assets of the bank were at 7.39 per cent of the book despite a 7 per cent reduction in the loanbook, on the back of Rs 5,950 crore in fresh slippages, as against 5.01 per cent in June and 1.60 per cent in last September.

The bank said the recognition cycle for bad loans is "nearing an end" and pointed out that its exposure to the troubled sectors including electricity and shadow banks have gone down by Rs 2,300 crore and Rs 1,750 crore, respectively.

The overall provisions came down to Rs 1,333 crore as against Rs 1,784 crore in the preceding quarter, but were still up from the Rs 939 crore in the year-ago period.

The loanbook, which points to a consolidation strategy adopted by the new management, grew only on the retail front which now constitutes 20 per cent of the book, but the loans to corporates and small businesses were down.

The core net interest income was at Rs 2,190 crore, lower by 4 per cent when compared with the preceding quarter due to a shrinkage of the loanbook, high NPAs and also a compression in the net interest margins to 2.7 per cent from 3.3 per cent in the year-ago period.

The bank said the fresh slippages alone had a Rs 200 crore impact on the net interest income, as the quantum of interest delivering assets went down.

The non-interest income also declined to Rs 950 crore from the year-ago's

Rs 1,300 crore.