After transfer of bad loans to the ARC, bank's top boss Prashant Kumar believes the GNPA ratio can fall to under two percent
Yes Bank has signed a share purchase agreement (SPA) with JC Flowers Asset Reconstruction Company (ARC), acquiring a 9.9 percent stake in the ARC at Rs 11.43 per share, the private sector lender announced on November 28 after market hours.
A subsequent acquisition of an additional 10% shareholding is subject to regulatory approvals, according to the bank.
Yes Bank's board of directors approved the sale of stressed loans worth Rs 48,000 crore to JC Flowers on September 20 after receiving no other challenger bids.
The bank intends to participate in the ARC as a minority shareholder. "This will be an ancillary to the bank's main line of business," it said. JC Flowers ARC had Rs 595 crore in assets under management as of March 31, 2022, with an annual turnover of Rs 19.9 crore.
Yes Bank's standalone net profit fell 32.2 percent year on year to Rs 152.8 crore for the three months ended September 30, 2022. The private lender's net profit for the same period last fiscal year was Rs 225.50 crore.
Total income during Q2 FY23, on the other hand, increased to Rs 6,394.11 crore from Rs 5,430.30 crore in the same period last year. Gross non-performing assets (NPAs or bad loans) fell to 12.89 percent of gross advances, down from 14.97 percent the previous year.
Prashant Kumar, the bank's top executive, believes the GNPA ratio can be reduced to less than 2% after bad loans are transferred to the ARC.
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