Mumbai: Private sector lender Yes Bank on Tuesday said RBI has found it underreported bad loans by ₹3,277 crore in FY19.
Of this, Yes Bank said ₹1,259 crore has already been classified as non-performing assets as on 30 September, 2019 and ₹2,018 crore is the incremental bad loan.
The bank also said that the divergence in provisions was ₹978 crore as on 31 March, 2019 and since some of it has been provided for by September end, the incremental provisions are to the tune of ₹632 crore.
Divergence in bad loans and provisions arise when the assessment differs between that of the bank and RBI.
“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 31 March, 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 it’s capital raise,” it added.
As per recent SEBI guidelines, banks are now required to disclose the divergence in the asset classification and provisioning immediately upon receipt of Reserve Bank of India (RBI’s) final Risk Assessment Report (RAR).
Banks, including Indian Bank, Union Bank of India, Bank of India, Indian Overseas Bank, Central Bank of India and Lakshmi Vilas Bank, have already reported their NPA divergences for last fiscal.
The disclosures need to be made in case the banks’ additional provisioning for non-performing assets (NPAs) assessed by the RBI exceeds 10% of the reported profit before provisions and contingencies, and if the additional gross NPAs identified by the RBI exceed 15% of the published incremental gross NPAs.
The 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. Yes Bank also recently said it has received a $1.2 billion (about ₹8,520 crore) binding offer for a stake purchase from a global investor.
With inputs from PTI