InvestorQ : How did Yes Bank manage to report such healthy profits for the March 2020 quarter?
Dilmini Mercia made post

How did Yes Bank manage to report such healthy profits for the March 2020 quarter?

Answer
user profile image
Dhwani Mehta answered.
4 months ago


Don’t get carried away by the profit figure as it is purely due to an extraordinary item. Yes Bank reported a net profit of Rs.2629 crore for March 2020 quarter; largely due to an extraordinary income of Rs.6297 crore on account of the Tier-1 bond write-down.

If this item is excluded, Yes Bank would have actually reported a loss of (Rs.3668) crore for the quarter. The bank’s books had been window dressed for long and that is now revealing. Gross NPAs spiked sharply from 3.22% to 16.80% YOY, on the back of under-reporting of NPAs in the past. Net NPAs also spiked to 5.06%.

In March, Yes Bank board was superseded by the RBI and SBI became the majority owner. Currently, SBI owns more than 50% of Yes Bank and is being run by a nominee CEO.