Yes Bank Q2 Profit Jumps 63% To ₹1,084 Crore, AT1 Bond Ruling Could Turn Earnings Into ₹5,217 Crore Loss
· Free Press Journal
Mumbai: Private sector lender Yes Bank reported a 63.2 percent rise in consolidated net profit to Rs 1,084.08 crore for the July-September quarter of FY27, compared with Rs 664.31 crore in the same period last year.
However, the bank's strong quarterly performance comes amid uncertainty over the Supreme Court's ruling on its Rs 8,415-crore Additional Tier-1 (AT1) bonds.
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Standalone Profit Rises Sharply
On a standalone basis, Yes Bank's net profit increased to Rs 1,080 crore from Rs 654.47 crore a year earlier. Profit was also slightly higher than Rs 1,070.99 crore reported in the June quarter.
The bank's reported financial results do not include the potential impact of the Supreme Court judgment concerning the write-down of AT1 bonds in March 2020.
AT1 Ruling Could Change Profit Picture
According to the bank, restoring the principal amount of AT1 bonds would turn its reported standalone quarterly profit of Rs 1,080 crore into a loss of Rs 5,217 crore.
Similarly, the reported profit of Rs 2,151 crore for the April-September period would become a loss of Rs 4,146 crore.
The adjustment would reduce the bank's net worth from Rs 53,268 crore to Rs 46,970 crore. Borrowings would increase from Rs 77,734 crore to Rs 86,149 crore.
YES Bank Shares Crash 14% To Rs 18.22, Rs 15,600 Crore AT1 Bond Payout May Hit 25% Of Net WorthHowever, its capital adequacy ratio would remain unchanged at 14.5 percent.
Supreme Court Decision Raises Concerns
On October 15, the Supreme Court upheld the Bombay High Court's judgment setting aside the March 2020 AT1 bond write-down.
Following the ruling, Yes Bank informed stock exchanges that it was examining the judgment, its financial implications, implementation requirements and available legal remedies.
The bank has not yet included these adjustments in its reported quarterly earnings.
Interest Income Shows Strong Growth
Yes Bank's net interest income increased 22.7 per cent to Rs 2,822 crore from Rs 2,301 crore a year earlier.
Non-interest income rose 14.4 percent to Rs 1,882 crore, compared with Rs 1,644 crore last year.
Net interest margin improved to 2.6 percent from 2.5 percent a year ago, although it declined from 2.7 percent in the previous quarter.
Deposits And Loans Expand
The bank's advances increased 23.7 percent year-on-year to Rs 3.10 lakh crore as of September 30.
YES Bank Q1 FY27 Net Profit Rises To ₹1,071.0 Crore, Total Income Climbs To ₹9,842.3 CroreDeposits grew 19.5 percent to Rs 3.54 lakh crore.
Asset quality also improved, with gross NPAs declining to 1.2 percent from 1.6 per cent and net NPAs falling to 0.2 percent from 0.3 percent.
Despite stronger operating performance, the AT1 bond ruling remains a major concern for the bank's financial position.