Private lender Yes Bank was back in the black in the first quarter ended June 30, 2019, but posted a 91 per cent drop in net profits compared with the same period last year because of a spike in provisions. The asset quality of the bank deteriorated with the percentage of gross non-performing assets (NPAs) rising to 5.01 per cent of total assets against 1.31 per cent of the assets in the year-ago period.

While Yes Bank had posted a standalone loss of Rs 1,506.64 crore in the fourth quarter of 2018-19, net profits in the April-June 2019 period stood at Rs 113.76 crore compared with Rs 1,260.36 crore in the same period of the previous year. This came as provisions shot up to Rs 1,784.11 crore from Rs 625.65 crore last year.

The private sector bank, which has been cleaning up its books under new CEO and MD Ravneet Gill, said based on the review of its credit portfolio, it had identified certain performing accounts that were facing stress because of the current market and liquidity conditions. The bank created a contingency provision of Rs 2,100 crore towards these identified accounts in March 2019.

In the first quarter, the bank utilised Rs 1,399.30 crore from the pool towards the specific provisioning of NPAs.

During the period, the bank’s gross NPAs deteriorated to 5.01 per cent of total assets from 3.22 per cent of the assets in the preceding three months.

In absolute terms, the amount of bad loans (gross) stood at Rs 12,092.10 crore against Rs 7,882.56 crore in the fourth quarter of 2018-19.

During April-June 2019, the bank witnessed gross slippages at Rs 6,232 crore and recoveries and upgrades of Rs 1,678 crore. In what should come as some relief, the net corporate slippages were entirely from the accounts classified as “BB & below rated” at the end of the fourth quarter of 2018-19.

Irregularities probed

In its notes to accounts, the bank said it had conducted an internal inquiry of the allegations made by an anonymous whistleblower to the stock exchanges in September 2018. The whistleblower had charged the banks of irregularities in its operations, potential conflicts of interests in relation to former MD & CEO Rana Kapur and allegations of incorrect NPA classification.

The bank said the inquiry was carried out by the management and supervised by the board of directors. The report that was reviewed by the board in November 2018.

Based on the findings till date, it has not identified any “material” financial statement implications, Yes Bank said.