Even if YES Bank's common equity tier 1 (CET1) ratio falls to about 11.4 per cent on a pro forma basis once its ₹8,415 crore of written-down additional tier 1 (AT1) bonds are reinstated, the lender does not have to raise capital immediately as it has other options, Chief Financial Officer Niranjan Banodkar said during the bank’s post-earnings analyst call on Monday.
The bank’s CET1 ratio was 13.7 per cent as of 30 September 2026, compared with 14 per cent at the end of June. The overall capital adequacy ratio was 14.5 per cent at the end of September, compared with 15.1 per cent at the end of June.
The Supreme Court on 15 October upheld the Bombay High Court's judgment setting aside the March 2020 write-down. It dismissed the appeals filed by the bank, the administrator, the Reserve Bank of India and the Union of India. Managing Director and Chief Executive Officer Vinay Tonse said that, as of 30 September, reinstating the principal would have a pro forma impact of about 240 basis points on CET1, including profits. The bank's overall tier 1 ratio is expected to stay around 13.7 per cent.
Banodkar called a CET1 ratio of 11-11.5 per cent "not ideal" and said the bank would want more comfortable capital levels irrespective of what the regulator says. He said, however, that the bank has buffers and the benefit of deferred tax assets, and that whether to raise capital now or later is a commercial evaluation. He added that a security receipts portfolio, with a face value of about ₹1,500 crore and a net asset value (NAV) of about ₹2,000 crore but zero carrying value, is another lever to unlock capital.
In its analyst presentation, the bank said its capital position remained well above the minimum regulatory requirements and it was evaluating various options to further strengthen its capital buffers to support future growth and progressively align capital levels with peers.
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The reinstatement is a balance sheet change from reserves to borrowings, with no repayment and no cash outflow, Banodkar said. The timing of reinstatement and any coupon payment are under assessment, he said, and the bank will be guided by the information memorandum. The lender is also reviewing legal options with its counsel and advisers.
Banodkar said two rating agencies, one international and one domestic, had called the verdict a credit-neutral event. He said the bank could grow about 11 per cent without consuming capital, and that 15 per cent growth in risk-weighted assets would use up about 30-40 basis points of CET1.
For the quarter ended September, YES Bank reported a 65 per cent rise in standalone net profit year-on-year to ₹1,080 crore for the second quarter of FY27, compared with ₹654 crore in the year-ago period, on the back of a sharp rise in net interest income and lower provisions. Sequentially, net profit rose 0.8 per cent from ₹1,071 crore in Q1FY27. For the first half of FY27, net profit rose 47.8 per cent to ₹2,151 crore from ₹1,456 crore.