YES Bank share price opened almost 10% lower at Rs 59.95 on the BSE today after the cash-crunched lender posted quarterly loss of Rs 629 crore in June-September 2019 quarter on Friday as compared to a net profit of Rs 964.70 crore in Q2 of September 2018, due to a rise in bad loans. This was the second-biggest loss reported by the lender after Rs 1,506.60 crore loss posted in March quarter this year.
YES Bank shares, however, recovered from early losses to gain over 7% intraday to Rs 71.35 on the BSE after the lender on Friday said that it was holding talks with investors to infuse around $3 billion in the private sector lender.
With an intraday volatility of 10.24%, YES Bank stock continues to trade higher than its 5, 20 and 50-day moving averages but lower than 100 and 200-day moving averages. Today, the stock has outperformed 'Banks' sector by 1.34%, where the sector has grown 0.46% intraday on BSE.
"Lower net interest income (down 9.6 per cent YoY), fee income and marginal hike in operating expenses resulted in impacted bottom line. There was a one-off impact of Rs 709 crore due to deferred tax assets adjustment, which resulted in a loss during the quarter gone by," the management said while addressing a conference call on November 1.
Net interest margin (NIM) for the quarter stood at 2.7%. Total income fell 4.28% to Rs 8,332.21 crore in Q2 September 2019 over Q2 September 2018. Other income (non-interest income) fell 19.5% to Rs 946 crore against Rs 1,473 crore in the year-ago period. The higher loss was also on account of one-time direct tax asset adjustment of Rs 709 crore as the bank chose to change its rate of income tax to 25.1% from 34.9% under the new corporate tax rate structure introduced by the government. The re-measurement of accumulated deferred tax resulted in the exceptional charge.
YES Bank share price has declined 60% value since March 219, when Ravneet Gill moved from Deutsche Bank to take over as the CEO of the private lender.
The capital adequacy of the private lender has plunged in the last few quarters due to accelerated recognition of non-performing assets (NPAs) under Gill.
However, the share price has gained 40% in the last week and 65% in one month.
A day before announcing its Q2 earnings, the bank said that it had received $1.2 billion binding offer from a global investor. The lender announced that one of the investors it was in talks with for a $1.2 billion capital investment was a family office in the US.
Apart from that, the bank is in talks to raise $1.6 billion from a clutch of six global private equity funds and two domestic mutual funds, Gill, who replaced promoter-chief executive Rana Kapoor, told reporters last week.
The private lender informed the exchanges on Thursday that the funds would be raised through issue of fresh equity shares. The bank also continues to be in talks with other potential investors, it said.
Gill told analysts recently on a conference call that the investor has the financial ability to provide the requisite capital and has the backing of a large US financial institution.