Yes Bank Ltd shares zoomed as much as 58% in early trade on Monday even as the private lender posted a record loss of Rs 18,564 crore for the third quarter ended December (Q3) due to a spike in bad loans and provisions.
At 10:09 am, Yes Bank shares were trading at Rs 39.05 on BSE, up 52.8%, after hitting the day’s high of Rs 40.40. Notably, the stock has recovered over 122% in the last five trading sessions.
Yes Bank, which is currently undergoing a government-initiated bailout executed by a bank consortium led by the State Bank of India (SBI), on Saturday reported gross NPAs (non-performing assets) of 18.87% for the December quarter compared with 7.39% logged in the September quarter.
In absolute terms, gross bad loans rose to Rs 40,709 crore as of the third quarter from Rs 17,134 crore in the previous quarter.
The bank informed that it had set aside provisions of Rs 24,765 crores in the third quarter compared with Rs 1,336 crore in the previous quarter.
Yes Bank’s deposit base shrunk by a massive Rs 72,000 crore from October 1, 2019 to March 14, 2020, the lender said.
Meanwhile, Yes Bank also informed exchanges that the additional Tier 1 (AT-1) bonds will be written down completely. “In light of the above provisions of the Basel III Circular, the Perpetual Subordinated Basel III Compliant Additional Tier I Bonds issued by the Bank for an amount of Rs 3,000 crores on December 23, 2016 and the Perpetual Subordinated Basel III Compliant Additional Tier I Bonds issued by the Bank for an amount of Rs 5,415 crores on October 18, 2017 have been fully written down and stand extinguished with immediate effect,” Yes Bank’s administrator Prashant Kumar said.
Separately, Yes Bank said it had received investment proposals worth Rs 10,000 crore from eight investors, including SBI.
The lender said SBI would be allotted 605 crore worth of shares at Rs 10 each, to take its investment to Rs 6,050 crore in the private lender. This is lower than Rs 7,250 crore of investment commitment SBI had earlier disclosed to exchanges. SBI’s investment of at least 26% stake will be locked-in for 3 years.
Seven other private banks will also be chipping in. ICICI Bank and HDFC Bank will each bring in Rs 1,000 crore, Axis Bank another Rs 600 crore, Kotak Mahindra Bank Rs 500 crore, Federal Bank and Bandhan Bank Rs 300 crore each, and IDFC First Bank another Rs 250 crore. The investment from these seven banks will total Rs 3,950 crore. These seven banks will also be locked-in for 75% of their holdings for three years.
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