Page 5 - Banking Finance November 2020

BANK UPDATE

BANKING

NEWS
NEWS
NEWS
NEWS
NEWS

YES Bank may sell Rs. RBL Bank profit up 165% Vishwavir Ahuja, MD & CEO, RBL Bank
RBL Bank posted a 165 per cent rise in said "We continue to be cautious. Bal-
32,344-cr bad loan ance sheet protection, capital preser-
net profit to Rs 144 crore in second
YES Bank is planning to sell its NPAs quarter ended September 2020 vation and risk mitigation continues to
worth Rs 32,344 crore to asset recon- (Q2Fy21) on an increase in net interest be of paramount importance. We are
struction companies (ARCs). It has ap- income (NII) and dip in provisions and seeing growth revival especially in re-
pointed EY to advise it on the sale. contingencies. tail businesses. Being well positioned
Several ARCs have been sounded off by on capital and liquidity, we are grow-
EY to submit their bids for the book. It had posted a net profit of Rs 54 crore ing in our chosen segments".
in July-September 2019 (Q2FY20).
YES Bank has already made provi-
sions of Rs 24,476 crore. These rep- Its NII grew by seven per cent Rs 932 UPI transactions cross 2
crore. The Net Interest Margin (NIM)
resent 76 per cent of its gross NPAs.
was flat YoY at 4.34 per cent. Sequen- billion in October
The sale of the NPA book will help
the bank regain its lost place in the tially NIMs fell from 4.85 per cent in The total number of transactions con-
banking industry, which was marred first quarter ended June 2020 (Q1FY20) ducted on the Bharat Interface for
by a scandal involving its former pro- due to proactive reversal of interest Money-Unified Payments Interface
moter Rana Kapoor. income on Non-Wholesale Advances (BHIM-UPI), known more simply as the
expected to slip by Q3 FY21. Other in- UPI crossed the 2 billion transactions
As part of its clean-up, YES Bank had come rose by just three per cent to Rs
recently sold bonds issued by 456 crore. count in a month in October, accord-
troubled housing finance company ing to the data released by National
Dewan Housing Finance Corporation The provisions and contingencies de- Payments Corporation of India (NPCI).
(DHFL) for Rs 500 crore in the sec- clined to Rs 525.57 crore in Q2FY21 The total value of these transactions
ondary market. The bank had in- from Rs 540.58 crore in Q2FY20. It set stood at Rs 3.8 trillion, up from Rs 3.2
vested Rs 2,000 crore in DHFL's aside Rs 310 crore as additional provi- trillion in September, the data showed.
bonds and managed to make a re- sions for Covid-19, taking the total As of October, as many as 189 banks
covery of 25 per cent. Covid-19 provisions to Rs 664 crore were using the UPI platform developed
Since the March quarter.
The bank is also looking at the option by the NPCI, compared to 141 in the
of selling its mutual fund business to The advances declined 4% to Rs 56,162 corresponding month a year ago. The
free up capital by the end of the cur- crore in September 2020 from Rs platform has seen tremendous growth
rent financial year. Under a new man- 58,476 crore a year ago. The deposits over the last eight months as the lim-
agement, the bank is also in talks with were up three per cent to Rs 64,506 ited use of cash has forced users and
other strategic investors to set up an crore in September 2020 from Rs businesses to shift priorities to online
ARC, which will house all the NPAs. 62,829 crore in September 2019. payments nearly overnight.

BANKING FINANCE | NOVEMBER | 2020 | 5