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.
(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.
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.
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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.
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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
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