India’s Yes Bank said on Friday it expects the reinstatement of its previously written-off additional tier-1 (AT1) bonds to reduce its core capital ratio by about 250 basis points.
On Thursday, the country’s top court set aside the bank’s write-off of 84 billion rupees ($883.7 million) in additional tier-1 bonds during its 2020 rescue, dealing a blow to the lender and regulators that had defended the move.
Capital ratios measure a bank’s financial strength by comparing its capital with its risk-weighted assets, indicating its ability to withstand losses
Yes Bank’s tier-1 capital ratio would remain unchanged at 14% on a pro forma basis, the bank said.
Yes Bank said it is reviewing the ruling and its implications and will make further disclosures “in due course”.
Separately, S&P Global Ratings said it does not expect India’s Supreme Court ruling against Yes Bank to affect its ratings, though it would weigh on future earnings.
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Yes Bank’s regulatory capital is adequate, with its common equity tier-1 ratio of 13.87% as of end-March 2026 able to absorb the expected 250 bps hit while staying well above the 5.5% minimum requirement, S&P said.
S&P expects the roughly 84 billion-rupee hit to common equity to be largely offset by the reinstatement of the bonds.
It said that the lender’s credit profile can withstand the ruling, which addresses procedural lapses in the write-down under the 2020 rescue.
The ratings agency expects Yes Bank to remain adequately capitalized, with its risk-adjusted capital ratio projected to remain between 8% and 8.5% through March 2028, compared with 9% in March 2026.
It was unclear whether Yes Bank would challenge the ruling, S&P said.
