Shares of YES Bank surged 20 per cent to Rs 31.36 on the BSE in the intra-day deals on Thursday after the private lender reported better-than-expected March quarter (Q4FY20) results. A combined 39.39 million shares have changed hands on the counter on the NSE and BSE till 10:00 am.

At 10:38 am, the stock pared its gains and was trading 9 per cent higher at Rs 28.75 apiece on the BSE. In comparison, the S&P BSE Sensex was at 31,522.31 levels, down 163.44 points or 0.52 per cent.

For the recently concluded quarter, YES Bank posted a net profit of Rs 2,628.6 crore on the back of on-time gain attributed to an exceptional item of Rs 6,296 crore. Besides, the bank has written-down additional tier-1 bonds as part of its planned reconstruction scheme, leading to a one-time gain of Rs 6,296 crore.

In the absence of the exceptional gain, the bank would have reported a net loss of Rs 3,668 crore. The bank had reported a net loss of Rs 1,506.4 crore a year ago, while the same was Rs 18,560 crore in Q3FY20.

Click here to read what analysts had expected

For FY20, as a whole, it posted a whopping loss of Rs 16,418 crore, on a standalone basis, compared to net profit of Rs 1,720.27 crore.

The earnings were better than what most of the analysts had expected. Kotak Securities, for instance, estimated the private lender to log net loss at Rs 4,404.4 crore in the quarter under review.

Furthermore, they had pegged the pre-tax loss, or loss before tax (LBT), at Rs 6,902.9 crore. The bank, however, posted a pre-tax loss of Rs 4,765.9 crore.

The bank’s net interest income (NII) for the March quarter came in at Rs 1,274 crore, up 19.56 per cent sequentially. The income, however, tanked 49 per cent YoY. Net interest margin (NIM) for Q4FY20 came in at 1.9 per cent, compared to 3.1 per cent a year ago.

On the asset quality front, gross non-performing assets (NPA) fell 19 per cent QoQ to Rs 32,878 crore, mostly on account of write-offs. Gross NPAs as a share of gross advances stood at 16.8 per cent compared with 18.87 per cent in the December quarter.

Total provisions, too, declined sequentially to Rs 4,872 crore compared to Rs 24,766 crore in the December quarter.

During the quarter under review, slippages came in at Rs 439 crore, mainly from its international banking unit. Recoveries and upgrades, on the other hand, stood at Rs 1,903 crore, while technical write-offs were at Rs 6,358 crore.



Loan book shrinks

The bank's deposits, however, plunged to Rs 1.05 lakh crore, down 54 per cent YoY compared with Rs 2.27 lakh crore. Advances, meanwhile, declined 29 per cent YoY to Rs 1.7 lakh crore from Rs 2.4 lakh crore in the year-ago quarter. The capital adequacy ratio under Basel-III fell to 8.5 percent from 16.5 percent in the year ago quarter.

"We expect outstanding loans to decline nearly 40 per cent YoY and similar trend on deposits. There is likely to be an increase in pressure on net interest margin (NIM). Revenue pressure will be high also due to weak fee income (sharp decline)," analysts at Kotak Securities had written in their results preview note.