MUMBAI (Reuters) – Yes Bank Ltd OUIB.NS aims to recover 85-100 billion rupees ($ 1.15-1.35 billion) of bad debts in the next fiscal year, its administrator said, days after India drew up a bailout for the lender in debt.
The private bank is also looking to reduce its reliance on mass deposits and will increase its retail loan portfolio to 60% from the current 40%, administrator Prashant Kumar told a conference on Tuesday. press in Mumbai.
Kumar will take over as managing director next week.
Yes Bank is under a mountain of bad debt due to its exposure to shadow lenders and distressed real estate companies, and suffered a loss of $ 2.51 billion in the December quarter. Its gross bad debt ratio jumped to 18.87% during the period, from 2.1% a year earlier.
Kumar said he should examine whether there was any underreporting of bad debts to Yes Bank.
The cost of credit, or the percentage of provisioning for bad debts to total bad credit loans, would be zero for the next fiscal year, as collections would represent new bad debt additions of 5% as reported by the bank, added. Kumar.
India approved a bailout for Yes Bank last week after the central bank placed the lender under a moratorium, limiting deposit withdrawals and replacing its board of directors. The State Bank of India (SBI), the country’s largest lender, is now preparing to take a 49% stake in Yes Bank.
Private banks have also joined the bailout, with ICICI Bank ICBK.NS, Axis Bank AXBK.NS and Kotak Mahindra Bank KTKM.NS among other things, make investments.
The Reserve Bank of India has also announced that it will step in to provide liquidity to Yes Bank, if needed. The moratorium will be lifted on Wednesday evening.
The bank has enough cash to support withdrawals, Kumar said, adding that customers don’t need to worry about the safety of deposits.
Shares of Yes Bank, which plunged to a low of 5.65 rupees earlier this month following the RBI takeover, closed up 58.09% at 58.65 rupees on Tuesday.
Reporting by Nupur Anand in Mumbai, written by Chris Thomas in Bengaluru, editing by Sherry Jacob-Phillips