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YES Bank posts first-ever quarterly loss of Rs 1,507 cr on IL&FS, Jet loans

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Mumbai: Private lender YES Bank posted its first quarterly loss, of Rs 1,507 crore, during the January-March 2019 period on account of a fall in non-interest income and a sharp increase in provisioning for bad loans, mainly due to defaults by the Infrastructure Leasing & Financial Services (IL&FS) group and Jet Airways. It had reported a net profit of Rs 1,179 crore in the fourth quarter of FY18.
For the full year, the bank’s net profit more than halved to Rs 1,709.3 crore from Rs 4,233 crore in 2017-18.
The bank’s results, the first under new Managing Director and CEO Ravneet Gill, were declared after an eight-hour long board meeting on Friday. Gill in a conference call with analysts said the bank would no longer be chasing the high growth targets of the past but would focus on consistent calibrated growth.
Gross non-performing assets (NPAs) as a percentage of gross advances soared to 3.22 per cent as of March 2019, compared to 2.1 per cent as of December 2018 and 1.28 per cent as of March 2018.
The bank saw slippages of Rs 3,480 crore during the quarter, of which Rs 552 crore was from an “airline company” and Rs 529 crore from a “stressed infrastructure conglomerate”.
YES Bank’s total exposure to IL&FS stood at Rs 2,528 crore as of March 31, 2019, of which Rs 2,442 crore has been classified as NPA. “Rs 86 crore continues to be classified as ‘standard’ and the bank has a provision of 15 per cent against this standard exposure,” said the bank in a statement.
About probe into whistle-blower complaints, the bank said it was conducting an internal enquiry into allegations about operational irregularities, incorrect NPA classification, and conflict of interest in relation to former MD and CEO Rana Kapoor. It has not identified any material financial impact so far.
YES Bank posts first-ever quarterly loss of Rs 1,507 cr on IL&FS, Jet loans The bank has also appointed Shagun Kapur Gogia, a nominee of the Madhu Kapur camp, and Ravinder Kumar Khanna additional directors on the board. “We will be focusing on a higher standard of compliance to gain the RBI’s validation and I am sure we will receive that soon,” Gill told analysts.
The bank’s provisions stood at Rs 3,662 crore for Q4 FY19 and at Rs 5,778 crore for FY19. This also included contingent provisions of Rs 2,100 crore against an identified stressed book of Rs 10,000 crore.
Net interest income (NII) for the quarter, which is interest earned less interest expended, grew 16.3 per cent to Rs 2,506 crore in Q4 FY19 as against Rs 2,154 crore in the year-ago quarter. The bank’s net interest margin declined to 3.1 per cent in March 2019 as against 3.4 per cent in the March 2018 quarter.
Non-interest income at Rs 532 crore for March 2019 fell by 62.6 per cent year-on-year. The fall was mainly due to low corporate banking fees on account of one-time reversal of Rs 280 crore and calibrated corporate growth, said the bank.
The bank’s management said it would make accounting changes for corporate fees, which would bring in an element of deferment of corporate fee recognition along the term of the loan given. The bank’s total capital adequacy ratio stood at 16.5 per cent with common equity tier-1 of 8.4 per cent as of March 2019.
The bank’s board approved raising debt up to Rs 20,000 crore and equity capital up to $1 billion (about Rs 7,000 crore), subject to approval from shareholders. The bank has not specified the time frame for raising capital. Its advances grew by 18.7 per cent year-on-year to Rs 2.42 trillion in FY19, while deposits grew by 13.4 per cent to Rs 2.27 trillion.


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Business

Sensex sheds 298.82 to close at 38,811; Nifty shrinks to 11,650

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Mumbai: The benchmark BSE Sensex erased early gains to end 299 points lower Thursday as investors booked profits after stocks soared to record highs after BJP’s strong showing in the Lok Sabha polls.

Sensex and NSE Nifty went on to record highs even as Lok Sabha election results showed that PM Modi-led NDA leading on over 300 seats. However after the euphoria during the morning session, Sensex shed 298.82 to close at 38,811 and Nifty shrank to 11,650 on the closing bell.

During the day, the Sensex hit the 40,000 mark while the Nifty crossed the 12,000-level for the first time ever. However, the indices succumbed to profit booking towards the fag-end of the session.

 

The 30-share Sensex tumbled 298.82 points, or 0.76 per cent, to close at 38,811.39. Similarly, the broader NSE Nifty settled 80.85 points, or 0.69 per cent, lower at 11,657.05.

IndusInd Bank was the biggest gainer in the Sensex pack, rallying 5.23 per cent, followed by Hero MotoCorp, Coal India, Yes Bank, PowerGrid, ICICI Bank, HCL Tech, L&T, Kotak Bank and Bharti Airtel, rising up to 1.56 per cent. On the other hand, Vedanta, ITC, Tata Motors, HDFC twins, Bajaj Finance, Sun Pharma, Tata Steel, TCS, ONGC and Infosys fell up to 5.53 per cent.

Riding on a massive Modi wave sweeping through most parts of India, the BJP was set to return to power Thursday as it led in 298 seats while the Congress trailed far behind with 52, according to trends released by the Election Commission for all 542 seats that went to polls.

“Markets were initially enthused to see the election results falling in line with the exit polls. However, the run up to the D-day was so sharp that it turned out to be a sell on news phenomenon,” said Devang Mehta, Head – Equity Advisory, Centrum Wealth Management.

Participants would now be keen to know the future course of action for bringing the economy back on track, solution to the liquidity situation, the union budget, onset and progress of monsoon in June and most importantly the earnings trajectory, he added.

According to traders, weak cues from other global markets and a depreciating rupee also weighed on investor sentiment. The rupee depreciated 37 paise to 70.04 against the US dollar in afternoon trade. Globally, bourses in Asia ended in the red.

Indices in Europe were also trading on a negative note in early deals. Brent crude, the global oil benchmark, was trading 1.79 per cent lower at USD 69.72 per barrel.

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Silver up on increased offtake; gold steady

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New Delhi: Silver prices rallied by Rs 200 to Rs 37,400 per kg in the national capital on Thursday, while gold held steady, according to the All India Sarafa Association.

Traders said silver prices rose on pick-up in offtake by industrial units and coin makers at the local spot market. Globally, spot gold was trading marginally higher at USD 1,276 an ounce, while silver was slightly up at USD 14.53 an ounce in New York.

In the national capital, gold of 99.9 per cent and 99.5 per cent purity dropped by Rs 10 each to Rs 32,670 per ten 10 gram and Rs 32,500 per 10 gram. Sovereign gold, however, held steady at Rs 26,500 per eight gram.

 

Silver ready surged Rs 200 to Rs 37,400 per kg, while weekly-based delivery fell by Rs 66 to Rs 36,234 per kg. Silver coins held flat at Rs 79,000 for buying and Rs 80,000 for selling of 100 pieces.

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India PC mkt declines 8.3 per cent to 2.15 mn units in Jan-Mar qarter

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New Delhi: Personal Computer (PC) shipment in India fell by 8.3 per cent in the January-March quarter of 2019 to 2.15 million units, registering a year-on-year decline for the third consecutive quarter, according to research firm International Data Corporation (IDC).

Besides, big commercial deals, market remained weak due to weak consumer demand, high inventory from previous quarters, and supply issues for Intel chips.

Shipments in the consumer segment saw a 26.5 per cent dip in the said quarter compared to the year-ago period. The commercial PC market saw a total shipment of 1.35 million units in the said quarter, a growth of 7.3 per cent over last year.

 

“The announcement of central elections on March 10, 2019 resulted in the model code of conduct coming into immediate effect further resulting in a delay in execution of government projects and impacting the commercial segment,” IDC said in a statement.

However, IDC expects the overall PC market in India to witness a growth in the second quarter. The commercial market is expected to pick up post new government formation in May, while the consumer market is expected to pick up largely driven by back to school campaign by vendors and online sales.

HP maintained its leadership position with an overall market share of 28.1 per cent in the first quarter of 2019, followed by Dell (25.9 per cent), Lenovo (25.2 per cent) and Acer (11.7 per cent).

The notebook PC (laptop) category accounted for 61.4 per cent of the shipment and witnessed a 9.8 per cent year-on-year decline.

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