Yes Bank expects bad loan troubles to persist SBI Card to list today amid market volatility

Gold imports dip 8.8% to $27 bn in April-February

Gold imports fell 8.86 per cent to $27 billion (about Rs 1.90 lakh crore) during the AprilFebruary period of this financial year. Commerce ministry data shows imports of the yellow metal stood at $29.62 bn in the corresponding period of 201819. The decline in gold imports has helped in narrowing the country's trade deficit to $143.12 billion during AprilFebruary from $173 billion a year ago.

New Delhi, March 15: Troubled Yes Bank expects pressures from sour loans to continue through FY21, even as yet one more private lender, IDFC First Bank, said it will by equities worth Rs 250 crore in beleaguered bank.

Yes Bank on Saturday declared the highest loss for any private sector lender at Rs 18,654 crore for the December quarter.

The bank's administrator and CEO-designate Prashant Kumar is confident of the bank's survival after a Rs 10,000-crore capital infusion.

The bank witnessed withdrawals of over Rs 72,000 crore of deposits in the last six months to Rs 1.37 lakh crore, but the Rs 10,000 crore capital infusion, coupled with over 1,000 branches and a strong customer base makes Kumar confident of Yes Bank continuing to be a "going concern".

"The proposed capital infusion and the bank's strong customer base and branch network will enable the Bank to continue its business for the foreseeable future, so as to be able to realise its assets and discharge its liabilities in its normal course of business," the bank said, quoting Kumar's assessment. In its investor presentation, Yes Bank said slippages, which went up to Rs 24,587 crore in the December quarter, will normalise only in FY22.

The bank told investors that it expects slippages to be at 5 per cent of the assets in FY21. The assets decreased by 22 per cent to Rs 2.90 lakh crore at the end of December 2019, as compared to the year-ago period.

Compared to the preceding quarter, advances overdue for 31 to 90 days (levels before they get tagged as NPAs), declined 43 per cent to Rs 13,911 crore.

The higher slippages and a reduction in loan book were key reasons for the 60 per cent decline in the core net interest income at Rs 1,065 crore, and also narrowing of the net interest margin to 1.4 per cent from 3.3 per cent a year ago.

In a stock exchange filing, IDFC First Bank said, "duly authorised committee of the board of directors" had at its meeting on March 14, "approval for an equity investment of upto Rs 250 crore comprising upto 25 crore equity shares at a price of Rs 10 each and face value of Rs 2 each, under the proposed Scheme of Reconstruction of Yes Bank Ltd."

Earlier on Saturday, Federal Bank had committed to invest Rs 300 crore in Yes Bank.

Apart from IDFC, ICICI Bank will invest Rs 1,000 crore, HDFC Rs 1,000 crore, Axis Bank Rs 600 crore, Kotak Mahindra Bank Rs 500 crore, Bandhan Bank and Federal Bank Rs 300 crore each in Yes Bank.

—Agencies

SBI Card shares will list on NSE and BSE on Monday amid tough market conditions and is expected to provide direction to the primary market in the days ahead. Listing premium for the issue would now depend on the market conditions on Monday morning, given the negative sentiment in the market last week followed by a bounce back on Friday.

Most brokerages gave a buy call on SBI Cards & Payments Services Ltd's initial public offering in early March the price band of Rs 750 to Rs 755 and the first issue by a credit card company in India raised Rs 10,354 crore, and was subscribed 26.54 times. But since then, Indian and global equity markets corrected by around 20 per cent.

Though the Indian market saw huge selling pressure till Friday morning, a dramatic recovery in the second half may augur well for SBI Card investors. But market analysts are not so bullish about the listing premium on SBI Card, given the market conditions and some find the valuation of Rs 755 per share, the price fixed for

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allotment, as high.

In the grey market, the premium on SBI Card has been coming down after the public issue was closed.

S. Ranganathan, head of Research at LKP Securities, said, "The grey market premium for the IPO of SBI Card has seen a sharp drop from Rs 350 levels to Rs 35 levels, which clearly points towards a muted listing in the range of Rs 800 to Rs 850. We expect the stock to get listed in the above range because of the refunds credited last week, which itself is an awesome amount."

There are no premium in the grey market and there are sellers at Rs 750, said another market source.