Money & Banking

This is the peak in terms of NPAs and slippages: YES Bank chief

Surabhi Mumbai | Updated on January 23, 2021

Prashant Kumar, CEO, YES Bank   -  Bloomberg

Bank to focus on recoveries, opening CASA accounts, says Prashant Kumar

Private sector lender YES Bank will focus on recoveries and opening CASA accounts and believes that Covid-related stress on its books would start easing in coming quarters.

“Our understanding is that this is the peak in terms of non-performing assets and slippages and now it would start coming down,” said Prashant Kumar, Managing Director and CEO, YES Bank.

Three factors

Kumar attributed this to three factors –improving collection efficiency, lower cheque bounce rates and throughput through accounts.

Also read: YES Bank posts Q3 net of ₹151 crore

“Collection efficiency is now at 96 per cent as against pre-Covid level of 97 per cent. The cheque bounce rate, which was normally at seven per cent to eight per cent rose to 18 per cent during Covid and is now at nine per cent. Through put through accounts has also reached almost pre-Covid levels. It means there is good churning in accounts, incidence of bounce backs are not there,” he told BusinessLine in an interaction after the bank’s third quarter results.

For the quarter ended December 31, 2020, YES Bank posted a standalone net profit of ₹150.71 crore with robust growth in net interest income. However, gross NPAs stood at 15.36 per cent of gross advances with proforma gross NPAs at nearly 20 per cent. The bank has also invoked loan restructuring of ₹8,062 crore.

Kumar expressed confidence that the bank’s Covid-related provisioning of ₹2,683 crore will take care of the restructuring invoked and also likely slippages.

On turnaround of the bank

When asked about the turnaround of the bank since the reconstruction scheme, Kumar expressed satisfaction in terms of the business strategy but highlighted the need for higher recoveries and taking care of the pandemic impact on the loan book.

“Turnaround in the sense of the business strategy and going on that path is very clear. But one part of the turnaround is the recovery from existing NPAs. The real turnaround story will be complete when you will recover a substantial portion. The impact of pandemic on the loan book and how to take care of it in the next 12 months,” he said.

The private sector lender has made recoveries of about ₹3,000 crore and has a target of ₹5,000 crore for the fiscal year.

“The P&L impact of the recovery was about ₹2,500 crore. It is very positive. We would like to touch the target of ₹5,000 crore and hopefully be near it,” he said.

As part of its deposit mobilisation efforts, YES Bank is also targeting opening one lakh CASA accounts per month. In December, it opened 85,000 accounts.

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Published on January 23, 2021
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