Yes Bank actually helped the market turnaround into the green. The stock price jumped up 10.5% to Rs.236.30 and currently remains among the top five gainers on the BSE.
Though the stress was seen in the Bank’s Q3FY19 performance, the market was happier about the appointment of Ravneet Singh Gill as its new chief executive officer. Gill is currently the CEO of Deutsche Bank in India. He will step down from that post to take over as Yes Bank CEO by March 1, 2019.
Going by the stock price surge, obviously the market has given Gill the thumbs up as the perception is that an “outsider” is a very good choice as he will bring new perspectives plus he comes with a very strong banking background, making him the best choice.
On the other hand, the numbers of Yes Bank for Q3FY19, though operationally good indicated as stress at the asset quality level. The Bank’s total exposure to IL&FS stands at Rs.2539 crore of which over 75% or Rs.1913 crore is classified as NPA. The balance of Rs.617 crore has been classified as standard thus being provided at 15%.
Total provisions during the quarter rose to Rs.550 v/s Rs.421 crore (YoY) – this includes Rs.508 crore as NPA of which Rs.478 crore are for loans to IL&FS.
Gross NPA for the quarter rose to 2.10% v/s 1.60% (QoQ) while Net NP rose to 1.18% from 0.84%.
On the operational front, NII showed a strong growth of 41% (YoY), driven by a 42% growth in advances. NIM was stable at 3.3%. Non-interest income saw a degrowth of 37% mainly on account of treasury loss (corresponding offsets through Provision Write-backs) and lower Corporate fees due to rebalanced sequential growth in Corporate Advances ü. Net profit fell 7% to Rs.1001 crore.