Yes Bank’s Deposits Slumped as Customers Withdrew

Deposits at Yes Bank continued to decline this year as worried customers withdrew money from the distressed lender.

17 Mar 2020, 08:12 AM IST

Yes Bank’s Deposits Slumped as Customers Withdrew

Customers stand outside Yes Bank ATM in Mumbai. (Source: BloombergQuint)

(Bloomberg) -- Deposits at Yes Bank Ltd. continued to decline this year as worried customers withdrew money from the distressed lender, which was seized earlier this month in the biggest bank rescue in the country’s history.

Deposits totaled 1.37 trillion rupees as of March 5 -- when Indian authorities took control -- down 17% from the start of the year, Yes Bank said in a statement Saturday. That followed a 26% year-on-year slide in the three months through December.

A lack of liquidity was cited as a key reason for the bailout. State Bank of India, ICICI Bank Ltd. and HDFC Ltd. are among the companies to have bought stakes in Yes Bank since it was seized.

“The bank took the opportunity of capital infusion to clean up the balance sheet as much as possible,” said Karthik Srinivasan, group head of financial sector ratings at ICRA Ratings.

Investors that hold more than 100 Yes Bank shares can’t sell 75% of their holdings for at least three years, according to rules notified last week. Yes Bank will be removed from several Nifty indexes Thursday, the National Stock Exchange of India Ltd. said in a statement Monday.

Yes Bank’s provisions climbed to 247.7 billion rupees in the quarter ended Dec. 31 from 13.36 billion rupees in the previous three-month period and only 5.5 billion rupees a year earlier, Yes Bank said. The bank’s gross bad-loan ratio as a share of total loans was 18.9% in the December quarter, up from 2.1% a year earlier.

Read More:
Buy Yes Bank But You Can’t Sell in ‘Hotel California’ Rescue
READ: Capital-Hungry Indian Lender Has Another Pain Point

The Mumbai-based bank swung to a net loss of 185.6 billion rupees in the last three months of 2019 from a profit of 10.02 billion rupees a year earlier, it said Saturday. It reported a loss of 6 billion rupees in July-September. Yes Bank had delayed announcing the results for about a month, saying it was busy trying to raise capital.

Yes Bank earnings:
CET1 ratio 0.6% end-December versus regulatory minimum 7.375% Gross bad-loan ratio 18.9% in December versus 7.4% September Slipped to a loss of 185.6 billion rupees for October-December from a 10 billion rupee net profit a year earlier Provisions 247.7 billion rupees in October-December compared with 13.36 billion rupees in July-September and 5.5 billion rupees in year earlier period

Yes Bank shares surged 45% in Mumbai on Monday to 37.1 rupees. State Bank of India will pay 10 rupees for each Yes Bank share.

Yes Bank rescuers:
State Bank of India will invest 60.5 billion rupees ICICI Bank 10 billion rupees HDFC 10 billion rupees Axis Bank 6 billion rupees Kotak Mahindra Bank 5 billion rupees Bandhan Bank 3 billion rupees Federal Bank 3 billion rupees IDFC First Bank 2.5 billion rupees

To contact the reporters on this story: Suvashree Ghosh in Mumbai at sghosh186@bloomberg.net;Pratik Parija in New Delhi at pparija@bloomberg.net

To contact the editors responsible for this story: Stanley James at sjames8@bloomberg.net, Will Davies