Yes Bank would have reported a net loss of ₹5,217 crore in the September quarter if it had recognised the impact of the Supreme Court verdict overturning the write-off of its additional tier-1 (AT-1) bonds worth ₹8,415 crore, the bank said in its Q2 investor presentation. Despite this, the private-sector lender reported a net profit of ₹1,080 crore for July-September, according to earnings announced on Saturday (livemint.com).
The Supreme Court ruled that the write-off of the AT-1 bonds was invalid because Yes Bank’s administrator exceeded powers reserved for the Reserve Bank of India (RBI) and the write-down conflicted with RBI circulars and bond terms. Yes Bank has not recognised any impact in its reported Q2FY27 results while it assesses the judgment’s consequences and determines the appropriate accounting treatment, the bank said (livemint.com).
The ruling means Yes Bank’s common equity tier-1 (CET-1) capital ratio would have dropped to 11.4% from the reported 13.7%, and its return on assets would have turned negative at 4.3% compared with the reported positive 0.9%. The bank, 24.9% owned by Japan’s Sumitomo Mitsui Banking Corporation, now faces a significant earnings hit and potential regulatory challenges as it navigates the fallout from the court decision (livemint.com).
Yes Bank’s investor presentation noted that the estimate of the ₹5,217 crore loss is subject to further legal, accounting, and regulatory assessment. The bank will have to restart annual coupon payments on the AT-1 bonds unless the verdict is overturned, adding to its financial obligations (livemint.com).