Mumbai: Troubled Indian lender Yes Bank reported a wider-than-expected quarterly loss of Rs 18,560 crore, and said it was continuing to analyse the allegations of wrongdoing by former managing director Rana Kapoor.
The loss, as reported in a filing late on Saturday, was significantly wider than the Rs 570 crore loss expected by analysts, according to Refinitv data. For the quarter a year ago, it had turned in a profit of Rs 1,001.85 crore.
The lender also indicated it would completely write down bonds worth around Rs 8,400 crore as part of a state-led restructuring plan, which involves the State Bank of India picking up a 49% stake in Yes Bank.
India last week approved a rescue plan for Yes Bank, once considered a rising star after it was set up in 2004 but now struggling with bad loans. Earlier, the Reserve Bank of India placed it under a moratorium, restricting deposit withdrawals and superseded its board.
Authorities have also opened investigations into Yes Bank's lending practices that led to its failure, while its founder Kapoor was detained and a case of money laundering registered against him.
The lender said its asset quality took a severe beating in the third quarter, with gross bad loans as a percentage of total rising to 18.87% as of December-end, from 2.1% a year earlier.
The bank said its deposits had dropped by 26%, while advances were down 24% .
The capital adequacy ratio of the bank stood at 4.1% for the quarter, while its Core Equity Tier 1 ratio (CET1) was 0.6% - much lower than the regulatory requirements of 7.375%.
In February, the bank said it would delay its third-quarter results by at least a month as it focused on raising capital.
BOND WRITEDOWN
In its filing, Yes Bank said it will completely writedown Rs 8,400 crore worth of Additional Tier 1 (AT1) notes.
AT1 securities are a type of contingent convertible bond (CoCo) - perpetual instruments designed after the financial crisis to try to ensure investors, rather than taxpayers, would be on the hook if a bank runs into financial difficulties.
The administrator of Yes Bank had previously said it was in discussion with some bondholders, amid signals that a complete write-off would not happen.
