Rescued Yes Bank has nearly 28% in stressed assets to deal with

March 2021 will mark a year since the banking system, with directions from the Reserve Bank of India, Come March, it will be a year since the banking system, nudged by the Reserve Bank of India, planned a rescue for Yes Bank Ltd. At the beginning of last year, the bank had a series of gross bad loans of 16.8% and many stressed assets of 33%. After a year, Yes Bank found itself dealing with yet another increase in bad loans, which happened due to Covid-19. The number of stressed assets at Yes Bank has increased to 28% of its net advances according to the quarter that ended on December 31st. This also included Yes Bank’s gross non-performing assets, which made up around 15.36% of advances or Rs 29,547 crore. Furthermore, the bank has a stressed asset pool worth Rs 18,551 crore.

Since March 31, 2021, Yes Bank has been reported to write off loans worth Rs. 8,274 crore. According to sources, the CEO admitted to this debacle and said that an overall contraction in the GDP of the country was scary. He further said that the bank currently holds a 77% provision coverage ratio against any kind of bad loans and the addition of Rs 2,683 crore in all covid related provisions available for future use. Prashant Kumar said that they should cover for any potential losses that may cover. 

The bank reportedly said that its board had approved raising funds worth Rs 10,000 crore through different methods on Friday. Around July 2020, the bank was able to raise Rs 15,000 crore via a follow-on public offer. In a report that was released on Monday, Macquarie Research said that such stressed loans, are at about Rs 28,000 crore. As opposed to this, Yes Bank has a provision coverage ratio of just about 10%.

According to Kumar, the bank is also expecting a growth in loans by 10 percent in the next financial year, which will mostly stem from retail and small and medium enterprises. 




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