On Tuesday, Yes Bank reported a lower net profit of Rs 1,084.03 crore for 2018-19 compared to Rs 1,720.28 crore announced earlier due to higher non-performing assets assessed by the Reserve Bank.
According to Live Mint, Yes Bank said the Reserve Bank of India has found that it has under-reported bad loans by Rs 3,277 crore in the year ended 31 March. Of this, Rs 1,259 crore has already been classified as non-performing as on 30 September and Rs 2,018 crore is the amount of incremental bad loans, Yes Bank said.
The divergence in net non-performing assets (NPAs) of the bank --the difference in bad loans reported by the bank and the assessment done by the RBI -- stood at Rs 2,299 crore for 2018-19, Yes Bank said in a regulatory filing. The private sector lender had reported a net profit of Rs 1,720.28 crore in 2018-19. "The adjusted (notional) net profit after tax for the year ended March 31, 2019 after taking into account the divergence in provisioning was at Rs 1,084.03 crore," it said. The divergence in provisioning was at Rs 978 crore. Additionally, the bank said that it intends to convene a meeting of its board of directors by the end of this month to finalise its capital raise.
According to recent guidelines by the Securities and Exchange Board of India, banks are now required to disclose divergence in the asset classification and provisioning immediately upon receipt of RBI’s final Risk Assessment Report (RAR).
The disclosures need to be made in case the banks' additional provisioning for non-performing assets (NPAs) assessed by the RBI exceeds 10 per cent of the reported profit before provisions and contingencies, and if the additional gross NPAs identified by the RBI exceed 15 per cent of the published incremental gross NPAs.
