The trends in the collection efficiency of Yes Bank are way below the pre-Covid levels and this could add to the existing stress book.
Macquarie Research said in a research note that while the retail book had 97 per cent collection efficiency in the pre-Covid times, the number has fallen to 89 per cent in September 2020 post the moratorium.
The similar number for SME book is 94 per cent (pre-Covid) and 83 per cent in September.
"Though the management didn't share the collection efficiency in the corporate book, it did acknowledge that collection efficiency in the corporate book is much lower than the pre-Covid levels and the overall book," Macquarie said.
"The trends in the collection efficiency are way below the pre-COVID levels and this in our view could add to the existing stress book", it said.
The higher Covid-19 provisions have kept the profits subdued. Despite reporting operating profit of Rs 13.6 billion, PAT was just Rs 1.3 billion, largely on account of higher provisions during the quarter.
Out of the total overdue accounts amounting to Rs 90.7 billion (5.4 per cent of loans), accounts worth Rs 40.6 billion are overdue for more than 30 days and another Rs 26.2 billion worth of accounts are in the 31-60-day bucket. Accounts worth Rs 23.9 billion are on standstill which otherwise would have slipped into NPA in the absence of Supreme Court order, Macquarie said.
Retail deposit growth still a concern. While the overall deposits grew 16 per cent quarter on quarter, growth in retail deposits was still lagging behind and stood at 8 per cent quarter on quarter and thus the share of retail deposits declined further to 31 per cent vs 33 per cent in 1QFY21 (37 per cent in 4QFY20).
Macquarie said that on the other hand, share of corporate deposits has inched up to 44 per cent as of 2QFY21 vs 41 per cent in 1QFY21 and 36 per cent in 4QFY20.
"In our view, retail term deposits will be a key number to watch out for as it defines the stability of the deposit franchise and the overall cost of funds for any bank. CASA deposits grew 11 per cent QoQ, largely led by growth in CA deposits. On the liquidity front, daily average liquidity coverage ratio (LCR) stood at 99.7 per cent vs 42.2 per cent in 1Q21. High dependence on corporate deposits remains a cause of concern," Macquarie said, as it flagged the concerns about Yes Bank.