Yes Bank is the top loser on the BSE, opening 10% lower at Rs.88.65 and going on to hit a new 52-week low at Rs.83.70.
The Bank actually returned to profits in Q1FY20, so in that aspect, given up the cleaning up exercise undertaken, the earnings are not as bad as what the markets have made it to be. It is probably more a reaction to brokerage houses, en masse bringing down target price, putting sell, ‘under review’ and underweight calls.
The weak asset quality and precarious capital position does weight heavily on the stock currently.
Its Gross NPA rose sharply from 3.22% to 5.01% (QoQ) and Net NPA was up at 2.91% from 1.86%.
Bad loans showed a 53% jump at Rs.12,092 crore and during Q1FY20, saw fresh bad loans worth Rs.6230 crore while recovering Rs.1680 crore and writing off Rs.340 crore.
It posted a net profit of Rs.114 crore v/s loss of Rs.1507 crore in Q4FY19.
Its net slippages stood at Rs.4500 crore. The Bank stated that its total real estate loans stood at Rs.24,000 crore, of which 25% has been isolated as sub-investment grade (NPAs) while balance 75% has minimal slippages.
Provisioning jumped up almost three times to Rs.1784 crore v/s Rs.626 crore (YoY).
Our Editor, Mr.SP Tulsian said,” Results are not bad. The focus is on balance sheet preservation and not on core business growth, which is the right approach. It the Bank is able to raise capital at Book Value, which is around Rs.110 per share, it will be seen as extremely positive. Hence trigger is now on capital raising and not on results.”