Yes Bank Q1FY20: This ship is NOT Sinking

Following are the important points from Yes Bank's Q1FY20 Numbers and Investor Presentation:

* Total Income stood at Rs.9089 crores, jump of 8% Q-o-Q and 10% Y-o-Y.

Interest Income stood at Rs.7816 crores, flat Q-o-Q and 19% higher Y-o-Y. This growth is despite the fact that some previous Interest Earnings related to recent NPA accounts were reversed. Other Income stood at Rs.1273 crores, 139% higher Q-o-Q and down 25% Y-o-Y. Other Income was boosted by Treasury Gains of about Rs.450 crores.

* Operating Profit stood at Rs.1959 crores, jump of 48% Q-o-Q and down 20% Y-o-Y.

Operating Expenses came at Rs.1594 crores, lower by 7% Q-o-Q and an increase of just 9% Y-o-Y. Some bit of serious savings on operating costs clearly evident. Interest Expended stood at Rs.5535 crores, higher by 3.4% Q-o-Q and by 27% Y-o-Y.

* Provisioning for the quarter stood at Rs.1784 crores, compared to Rs.3662 crores in previous quarter and Rs.626 crores a year ago.

Provisioning is said to have included about Rs.1100 crores of one-time Marked-to-Market losses on a few investments due to rating downgrade of the assets. That means NPA Provisioning stood at just about Rs.700 crores.

* Net Profit stood at Rs.114 crores, compared to a Loss of Rs.1507 crores in the previous quarter and a Profit of Rs.1260 crores a year ago.

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* Retail Term Deposits increased 38% Y-o-Y and 8% Q-o-Q to a figure of about Rs.63,300 crores.

This is excellent news, especially in the backdrop of the terrible quarter Yes Bank faced at the stock market, while being surrounded by huge amounts of rumour-mongering, claiming that the Bank is set to face a huge Liquidity crisis and will find it difficult to survive. Strong growth in Retail Term Deposits means that customers are reposing faith in the Bank.

* Corporate Term Deposits too grew by 13% Y-o-Y and 1.2% Q-o-Q to a figure of about Rs.93,400 crores.

Even the corporate clients seem to have held faith in Yes Bank and did not get too affected by the rumours in the Stock market.

* Retail Loan Book grew 43% Y-o-Y and 7.2% Q-o-Q to reach a figure of about Rs.43,200 crores.

Retail segment contributed about 61% of the incremental growth in Yes Bank's overall Loan Book. It's other segments, i.e. Corporates and MSMEs too continued on the growth path, though at a slower pace of about 5 to 6%. Yes Bank's Corporate Loan book now stands at about Rs.1,31,800 crores.

* Yes Bank continues to post strong growth in all kinds of Digital Transaction processing with Market Leadership in many of them.

Yes Bank processed about 44 million IMPS transactions, 85 million AePS (Aadhar enabled Payment System) and 767 million UPI transactions during Q1FY20, with strong double-digit growth Q-o-Q.

* Gross NPAs have increased to Rs.12,092 crores and Net NPAs to Rs.6,883 crores.

This is only major sore point from Yes Bank's Q1 numbers. Most of the NPAs seem to be coming from the EPC industry segment. The most likely accounts are from Reliance Infrastructure subsidiaries and Essel Group companies. But the promoters of both the groups have promised to repay all loans by selling their Assets. Even Yes Bank management seems to be fairly confident about recovery from most of these NPA accounts.


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