The crowd outside Yes Bank in Ahmedabad. (Express photo/Javed Raja) The crowd outside Yes Bank in Ahmedabad. (Express photo/Javed Raja)

Yes Bank on Saturday reported a huge loss of Rs 18,564 crore for the December 2019 quarter as against a profit of Rs 1,000.5 crore in the same period of last year in the wake of a spurt in bad loans.

Gross non-performing assets of the bank skyrocketed to Rs 40,709 crore in the December quarter from Rs 5,158 crore a year ago. Bad loans constitute as much as 18.87 per cent of total advances as against 2.10 per cent last year.

According to the bank’s auditor BSR & Co, as of December 2019, the bank has breached the regulatory requirements of maintaining the minimum CET l ratio as per the requirements of the RBI. The CET 1 ratio as of December 2019 stood at 0.60 per cent as compared to the minimum requirement of 7.375 per cent.

“The breach is primarily on account of the increase in the provision for advances during the quarter ended December 2019 as the bank has decided, on a prudent basis, to enhance its provision coverage ratio on its non-performing asset (NPA) loans over and above RBI loan level provisioning and also considered slippages in NPAs post December 2019 till the date of the financial results while determining NPAs and related provisioning requirements,” the auditor said.

As per the RBI norms, the breach of capital adequacy ratios is a serious matter and there is uncertainty around the regulator’s potential action for such a breach.

“Consequently, we are unable to comment on the consequential impact of the above regulatory breach on these financial results. The bank became aware in September 2018 through communications from stock exchanges of anonymous whistleblower complaints alleging irregularities in the bank’s operations, potential conflicts of interests in relation to the former MD and CEO and allegations of incorrect NPA classification,” it said.

The bank conducted an internal enquiry of these allegations, which was carried out by management and supervised by the erstwhile board of directors. “The enquiry resulted in a report that was reviewed by the erstwhile board of directors in November 2018. Based on further inputs and deliberations in December 2018, the erstwhile Audit Committee of the bank engaged an external firm to independently examine the matter,” it said.

During the quarter ended December 2019, the bank identified certain further matters which arose from independent investigations initiated by lead bankers of a consortium on the companies/ borrowers allegedly favoured by the former MD and CEO, the auditor said.

The bank is continuing to analyse the allegations in the whistle-blower complaints including the reports of this external firm along with the matters highlighted by the independent investigations against certain borrowers of the bank and work is currently ongoing, it said.

“In March 2020, the Enforcement Directorate has launched an investigation into certain dealings of the former MD and CEO and arrested him on March 8, 2020. There are reports that the CBI is also launching an independent investigation into the same. In view of these ongoing enquiries and investigation, we are unable to comment on the consequential impact of the above matter on these financial results,” the auditor said.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Business News, download Indian Express App.