YES Bank share price fell in trade today after global ratings agency Moody's placed the lender's ratings under review for downgrade. Moody's said Ba3 rating of the bank can be downgraded due to weak September quarter earnings and the bank managing to get only a commitment for $1.2 billion in funding recently.
YES Bank share price fell 3.93% intra day to Rs 66.05 against previous close of Rs 68.75 on BSE. It closed 3.27% lower at Rs 66.50 on BSE. It was the top Sensex gainer in trade today. On NSE, the stock ended 3.57% to Rs 66.25. YES Bank stock has fallen after two days of gain. The mid cap stock has lost 69.33% during last one year and fallen 63.55% since the beginning of this year.
Moody's sees the bank's total bad assets to top 12 percent this year based on bank's own assessment of over 40 percent of its Rs 30,000-crore of exposure to lower rated entities turning sour before March.
"The bank's weakening financial position can be somewhat offset by the planned capital raising. Nevertheless, there were significant execution risks around the timing, price and regulatory approvals required," the agency noted and warned that any inability to raise the fund will negatively impact the credit profile and ratings.
A rating downgrade is possible if it were to fail to raise the capital or if the quantum of dud loans rose or because of a deterioration in the liquidity position, it said.
YES Bank reported its second-biggest loss in Q2 since listing in May 2005. It reported a net loss of Rs 600 crore for the second quarter ended September 30, 2019 on November 1, impacted by one-time deferred tax adjustment of Rs 709 crore due to change in corporate tax rate regime. Excluding the one-time tax impact, adjusted profit after tax stood at Rs 109 crore, the bank said in an exchange filing.
The bank had posted its biggest loss of Rs 1,506.60 crore in March quarter this year. It reported a net profit of Rs 964.70 crore in the same quarter last year, YES Bank.
The bank's net interest income (NII), or the core income a bank earns by giving loans, declined 9.6 per cent to Rs 2,186 crore in Q2FY20 from Rs 2,418 crore in Q2FY19. Net interest margin (NIM) for the quarter stood at 2.7 per cent. The other income (non-interest income) decreased by 19.5 per cent to Rs 946 crore against Rs 1,473 crore in the year-ago period.
YES Bank's asset quality declined during September quarter, with gross non-performing assets (NPAs) ratio rising sharply to 7.39 per cent versus 1.60 per cent in the year-ago quarter.
Net NPAs stood at 4.35 per cent as compared to 0.84 per cent in the corresponding quarter last year. In absolute terms, Gross NPAs stood at Rs 17,134 crore and net NPAs were 9,757 crore in the September quarter. During July-September quarter, gross slippages were at Rs 5,945 crore and recoveries stood at Rs 867 crore, YES Bank said.
By Aseem Thapliyal