Yes Bank could see a ₹5,300‑₹5,400 crore dent to earnings in its next quarterly filing— a hit that dwarfs the ₹1,071 crore net profit it posted in June. The decision comes as the bank prepares to release its September quarter results tomorrow.
The blow follows the Supreme Court's Thursday ruling that overturned the Bombay High Court's earlier order to set aside the ₹8,415 crore AT‑1 bond write‑off. The bank had written down those bonds during the RBI‑led reconstruction in 2020, a move now deemed unauthorized.
If the bank reinstates the bonds, it will reverse the earlier write‑down and the associated loss will flow through the profit‑and‑loss account. The adjustment will also trigger coupon obligations— the 9.5% and 9% rates equate to roughly ₹772 crore in annual interest if fully recovered.
CRISIL estimates a full reinstatement could trim Yes Bank's Common Equity Tier‑1 ratio by 2.3‑2.5 points, while boosting AT‑1 capital by a similar margin, leaving overall regulatory capital largely intact.
S&P Global Ratings noted that the ruling is unlikely to dent the bank's credit rating, but the accounting hit could weigh on earnings for a year. The agency emphasised that the capital structure remains adequate despite the shift.
The bank's board may choose to recognise the hit in the September quarter or defer it to December, depending on the legal assessment, and will likely update guidance in the forthcoming earnings release. Investors should watch for any commentary on the impact to future dividend policy.