Yes Bank posts Rs 18,500 crore loss in Q3; declares share allotment under Reconstruction Scheme

Yes Bank posted its third-quarter results today.

Crisis-hit private-sector lender Yes Bank, Saturday posted its quarterly results for the quarter ended December 31. The lender reported a loss of Rs 18,564 crore, as compared to a net profit of Rs 1,000 crore reported by the bank in the same quarter last year. Yes Bank has posted a net loss of Rs 600 crore in the previous quarter. Bad loans on the books of Yes Bank stood at Rs 40,709 crore, shooting up significantly from Rs 5,158 crore in the same quarter last year. The cash-starved lender lost more than Rs 40,000 crore worth of deposits quarter-on-quarter. In a separate filing to the stock exchanges, Yes Bank also announced the issuance and allotment of equity shares, totaling to 395 crore equity shares worth Rs 3,950 crore to private institutional investors and 605 crore shares to State Bank of India for Rs 6,050 crore.

The authorised share capital of the Bank has been increased in accordance with the terms of the Scheme from the existing Rs 1,100 crore to Rs 6,200 crore, Yes Bank informed the bourses.  The number of equity shares has been altered from 450 crore equity Shares of INR 2 each  each to 3,000 equity shares of INR 2 each aggregating to Rs  6,000 crore. The authorised preference share capital of the Bank shall continue to be Rs 200 crore.

Among the private investors, HDFC and ICICI Bank will invest Rs 1,000 crore for 100 crore equity shares. Axis Bank will invest Rs 600 crore for 60 crore share, while Kotak Mahindra Bank will shell-out Rs 500 crore for 50 crore shares. Federal Bank and Bandhan Bank will pick up 30 crore shares each for Rs 300 crore that the two banks will invest separately. Lastly, IDFC Bank Limited will invest Rs 250 crore for 25 crore shares.

In its third quarter results, Yes Bank said that the total income generated by the bank slipped from Rs 8,874 crore to Rs 6,297 crore on-year basis. The troubled lender had delayed its quarterly results as it stepped up efforts to bring in investors. After failing to do so, the board of Yes Bank in the first week of March was superseded by the reserve bank of India and a moratorium was placed on the bank. Yes Bank reported a jump in provisions to Rs 24,765 crores in the period under review against Rs 550 crore in the same period last year.

On Friday, the Union Cabinet approved the Yes Bank Reconstruction Scheme 2020, which will see India’s largest public-sector lender State Bank of India (SBI) pick-up 49 per cent stake in the cash-starved lender. While SBI Bank will have a lock-in period of three years where it can not take its initial investment below 26 per cent, the private investors will have to stay invested up to 75 per cent of the initial investment for the same time period.

It will not just be the institutional investors but individual existing shareholders having 100 shares or more will have their investment locked-in at 75 per cent for three years. However, new shareholders who purchase shares after the reconstruction scheme was approved will not be subject to the lock-in period. With the commencement of the scheme on Friday, the moratorium which Yes Bank was placed under by the Reserve Bank of India and the withdrawal limit of Rs 50,000 imposed on customers till April 3, will be lifted in three working days.

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