Yes Bank has been in the news for all the wrong reasons recently. According to the notification:. Read our detailed post on this. Yes bank had already been hit in their quarterly results with NPAs doubling in the last quarter, due to their having take provisions for an account probably JP Associates where they think recovery happens in the near term. But things, with their annual report, have gotten worse.

The gross NPAs reported by the bank in FY16 were at Rs The consolidated EPS disclosed by banks stood at Rs If the NPAs had been identified according to RBI and necessary provisioning done the EPS would have fallen to Rs And remember RBI does the NPA identification once a year. And the above said data is for the FY The idea of NPAs is: This is a Gross NPA.

This blocking out provisions hits bank capital and reduces their profits. Post all the hullabaloo, Yes Bank comes with a clarification. And it still doesnt address the massive divergence issue. The clarification also states that the new overall gross NPAs for March 31, stand at Rs This clarification came on 12th May Above is the YEs Banks Clarification, disclosed in its Annual report and also on BSE.

But this cr. The results which were disclosed on 19th April Just 23 days prior to clarification has stated gross NPAs at As you can see, there is no cr. Even the Net NPA is cr. How can a bank state a clarification with a wrong current NPA number? Yes bank has gone around saying that there is this cr. Yes Bank may state that there is no impact to the current results, all of this might change after the RBI survey later this year. Current provision coverage ratio stands at This might decline if it incorporates the NPAs identified by RBI.

It might require some serious provisioning — and thus will hurt their capital. Yes bank was one of the few banks which was in pink of its loan book.

Consistent upward valuation has pushed the stock to new highs of Rs Levels. The stock has almost doubled from Rs levels since April 1st until last week. The RBI should note that the cr.

NPA figure is totally uncorrelated with the official NPA figures released earlier. Also the missing cr. Capitalmind has no position on Yes Bank. None of the authors hold it. The credit cost for FY16 was restricted to 50 bps vis-a-vis the original management credit cost guidance of bps. The credit cost for FY17 was 53 bps vis-a-vis the original management credit cost guidance of bps. This post has nothing to do with the AQR Asset Quality Review. Essentially what Yesbank is saying that the RBI notes in their AQR were fully accomodated at that time.

We have no comment on credit costs as that is not mentioned in this post. YES BANK reiterates that the disclosure on divergence in asset classification and provisions in NPAs in the Annual Audited Financial Statement is in conformity with the RBI circular.

The reported divergence was for the prior period ended FY While the disclosure requirements came in on April 18, the actual NPA requirement would have been communicated much earlier to Yes bank. Additionally on the point in your article regarding gross NPA outstanding at INR Please note that this outstanding is from the Divergence of GNPA as disclosed in our AR, which best money making in runescape eoc includes one borrower with wolfram stock market exposure of INR This number also includes the full impact of the INR What Yes Bank is saying is that the cr.

Meaning, they said cr. RBI later said no, it should have been cr. Now Yes Bank is saying, okay, cr was then, but we brought it down to cr. There will be another counter-RBI number later when they do another audit for this year. I would like to draw your attention to the fact that the INR Accordingly, this has been classified and disclosed in our Annual Financial Statements and the Basel III Disclosures in April.

Reserve Bank of India

Since the finalization was only in April,this would obviously not reflect in the December 31, disclosures. The question still remains about why some NPAs should be classified differently according to RBI, but our phone conversation revealed two things:. This explanation is useful to have. Why wait till people find this info in the annual report and question them about it?

We are changing the headline. The story remains as is and carries the Yes Bank Clarification above. The missing crore in Q3 is well understood.

The presumably JPA NPA was never recognized before the RBI notification on April After the RBI notification both IndusInd kpmg forex Yes had to recognize the JPA account as non performing in Q4, they had not done so till Q3 even if we deduce that they were overdue.

On their part the banks may have a reason why they did not do so. JPA has sold their cement assets to UltraTech and once the deal is complete it is in the final stages the loan will turn good again.

It is well understood as the debt takeover is agreed as part of the acquisition. On the other hand why RBI insists on recognizing the assets as non performing is also justified. They are saying follow the process, recognize NPA, take a hit by provisioning, and when the account turns good your NPA goes down and your profits increase because of provisions write back.

RBI does not have to answer the shareholders. In a sense they are doing their job as a regulator. The main culprit is the sluggish system in India — the UltraTech acquisition is taking forever, a deal where everyone seems to have agreed. In stockbrokers perth wa other sane country the loan would be in the books of Aditya Birla now and would be a performing asset.

If Ultratech suddenly decides to call off the deal, the banks are stuck. By the way, the point raised by Shreesh yes bank forex services still valid that YESBANK says that its GNPA as on March 31 is One of those figures have to be wrong. I independently verified the numbers again, something seems to be wrong.

The sad part is that Yes Bank seemed so far to be very well and professionally managed, and there was no doubt in my mind about their corporate governance standards. Yes, these statements are confusing indeed. I hope there is a better clarification in the offing. While I am not taking side of Yes Bank, the RBI is a geriatric institution like CAG and the Government, follows practices that are out of sync with business realities and great at pointing fingers on hindsight.

The latest craze of RBI is to recognise NPAs. Fine it is good. But what about business practices. Government companies and governments never pay on time. The court procedures for enforcement of business discipline or payment resolution take years. So RBI and government agencies busy removing organs of a sick patient in the hope they will not poison him further but the patient would be dead very soon. I read the annual report relevant section and now I get where Shreesh is wrong.

Yes Bank says, that of the total GNPA divergence of INR It does not say that Which means that they would have disclosed approximately crores GNPA on their own in FY17 if not for the divergence from FY16 that RBI compelled them to disclose.

Yes Bank also says that besides this amount of Now the only question that remains is that whether RBI audit of FY17 books will reveal some more suspect assets. So the exact wording is: They should have said our overall gross NPA is cr.

This is not said, so it looks incorrect. They mention fresh GNPA of cr added during the year, which is less than cr divergence noted by RBI. Particularly pagesection They mention fresh GNPA of 26, All these questions need to be raised. Kapoor has to come out with proper and flawless explanation to counter the allegations cropped up against Yes Bank now with regard to the NPAs and bring the glory lost in the recent weeks in the interest of public and investors without further delay.

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Wednesday, June 21, My Account Bond Baba Data Analysis Data Monster Go to Slack Opinion Uncle Theta. What Does The RBI Notification Say? According to the notification: The RBI audit will usually uncover more NPAs than the banks have revealed. This audit is usually done after the end of the year. TAGS RBI NPA Notification Yes Bank NPA Divergence YESBANK.

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Please read my comment below. Or you may copy me on their email and I can ask the above questions politely. Page and of the AR would need to be re-written. LEAVE A REPLY Cancel reply. Please enter your name here. You have entered an incorrect email address! Deepak Shenoy - January 25, Shreesh - June 24, 7. Deepak Shenoy - October 19, Shreesh - October 21, 6. Deepak Shenoy - October 16,