India’s struggling private lender Yes Bank has reported its largest ever quarterly loss due to an increase in bad loans.
For the third quarter ended December 2019, Yes Bank reported a net loss of INR185.6bn ($2.5bn) compared with INR10bn ($134m) net profit for the same period last year. In the preceding quarter, the bank had reported a net loss of INR600m ($8m).
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The bank also revealed a sharp decline in its loan book, with non-performing assets increasing to 19% of loans compared with 2% the earlier year.
The bank’s deposits had dropped by 26% year-over-year, while net advances were down 24%.
The earnings release comes about a week after the Government of India’s approval of the draft reconstruction plan for Yes Bank, which operates over 1,000 branches across all 29 states in the country.
The Reserve Bank of India (RBI) placed the bank under a moratorium and initiated a scheme of reconstruction. As part of the draft plan, State Bank of India (SBI) was permitted to hold up to 49% interest in Yes Bank.
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By GlobalDataPrivate sector banks such as ICICI Bank, HDFC Bank, Axis Bank and Kotak Mahindra Bank, Bandhan Bank and Federal Bank as well as housing finance company Housing Development Finance Corporation will also acquire a stake in Yes Bank.
SBI banker Prashant Kumar has been appointed as the new CEO of Yes Bank. Kumar, who is currently office of the Administrator appointed by the RBI, will take over his new responsibilities once the moratorium is lifted.
