Despite a potential drop in the CET1 ratio to approximately 11.4 percent on a proforma basis after the reinstatement of AT1 bonds worth 8,415 crore rupees, the creditor stated that it is not obligated to immediately increase capital as it has other options. This was reported by Chief Financial Officer Niranjan Banodkar during the bank's analytical call after the release of its report on Monday.
As of September 30, 2026, the bank's CET1 ratio stood at 13.7 percent, slightly below the 14 percent figure recorded at the end of June. The overall capital adequacy ratio reached 14.5 percent by the end of September, compared to 15.1 percent at the end of June.
The Supreme Court upheld the Bombay High Court's decision on October 15, which overturned the write-down conducted in March 2020. The court dismissed appeals filed by the bank, the administrator, the Reserve Bank of India, and the Union of India. Managing Director and CEO Vinay Tonsen noted that by September 30, the reinstatement of the principal amount would have a proforma effect of about 240 basis points on CET1, including profit. Meanwhile, the bank's overall Tier 1 ratio is expected to remain around 13.7 percent.
Banodkar called the CET1 ratio in the 11–11.5 percent range 'not ideal' and emphasized that the bank prefers a more comfortable capital level, regardless of regulatory statements. Nevertheless, he clarified that the bank has reserves and the advantage of deferred tax assets, and the decision to raise capital now or later is a commercial assessment. He also mentioned a portfolio of guarantees worth approximately 1,500 crore rupees and Net Asset Value (NAV) of about 2,000 crore rupees, but with zero book value, as another lever for freeing up capital.
In its presentation to analysts, the bank stated that its capital position remains significantly above minimum regulatory requirements. The bank assesses various opportunities to further strengthen its capital buffers to support future growth and gradually bring the capital level in line with competitors.
Banodkar added that the reinstatement represents a balance sheet change from reserves to borrowings without repayment and without cash outflow. He reported that the timelines for reinstatement and any coupon payments are under evaluation, and the bank will be guided by the investor memorandum. Furthermore, the creditor is exploring legal options with its consultants and advisors.
Banodkar noted that two rating agencies—one international and one domestic—described this decision as having a neutral impact on the credit rating. He also stated that the bank is capable of growing by approximately 11 percentage points without using capital, while a 15 percent growth in risk-weighted assets would require the use of about 30–40 basis points of CET1.
For the quarter ending in September, YES Bank reported a 65 percent year-on-year growth in net income to 1,080 crore rupees for the second quarter of fiscal year 27, compared to 654 crore rupees the previous year. This growth was driven by a sharp increase in net interest income and a reduction in provisions. Compared to the previous quarter, net profit rose by 0.8 percent to 1,071 crore rupees in the first quarter of fiscal year 27. For the first half of fiscal year 27, net profit increased by 47.8 percent, reaching 2,151 crore rupees compared to 1,456 crore rupees.