# Yes Bank CEO Clarifies AT1 Bond Reinstatement Impact Management confirms balance sheet adjustment without immediate cash outflow following Supreme Court ruling. - **Source:** [mint - industry](https://www.livemint.com/rss/industry) - **Published:** 2026-10-19 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/118ddc1e-d3f1-4d82-ab41-b3ea7f63026a ## No Immediate Cash Outflow MD and CEO Vinay Tonse confirmed that reinstating ₹8,415 crore in AT1 bonds will not trigger cash outflows. The process functions as a balance sheet adjustment, moving funds from reserves to borrowings. This accounting shift ensures the bank avoids immediate liquidity pressure while complying with the recent Supreme Court mandate regarding 2020 write-downs. ## Supreme Court Ruling Implications The Supreme Court upheld a 2023 Bombay High Court decision to set aside the March 2020 write-down of AT1 instruments. Yes Bank is currently assessing the full legal and financial consequences of this October 15 judgment. Management has not yet finalized decisions regarding potential further legal remedies or specific capital-raising timelines. ## Capital Ratio Projections The reinstatement is expected to reduce the Common Equity Tier-1 capital ratio by 240 basis points to 11.4%. While the overall Tier-I ratio remains stable at 13.7%, the return on assets is projected to erode to -4.3%. Despite these shifts, leadership maintains that current capital levels provide sufficient headroom for continued growth. ## Strong Operational Performance Yes Bank reported a net profit of ₹1,080 crore for the September quarter, marking a 65% year-on-year increase. Net interest income rose by 23% to ₹2,822 crore, supported by a 24% growth in advances. Total deposits also saw a robust 20% increase, reaching ₹3.54 trillion by the end of the quarter. ## Margin Pressure Factors Net interest margins moderated to 2.6%, a 10 basis point decline from the previous quarter. This compression was largely attributed to the scale of ₹18,575 crore raised in foreign currency non-resident deposits. Management noted that a portion of the corresponding ₹15,000 crore in foreign-currency term loans remained undeployed during the reporting period. ## Future Growth Strategy Management plans to deploy credit aggressively throughout the third and fourth quarters to improve performance. They anticipate that rising interest rates will exert a positive bias on future margins. The bank remains focused on balancing its regulatory capital requirements with the need to sustain its current growth trajectory in the market. ## Pro Forma Financial Impact While the bank did not incorporate the judgment's impact into its official September earnings, pro forma calculations indicate a potential net loss of ₹5,217 crore. This hypothetical figure highlights the significant scale of the liability reinstatement. The bank continues to evaluate whether fresh capital raising is necessary to maintain comfortable buffers. ## Institutional Ownership Context The bank's capital structure remains influenced by significant institutional involvement, including the 24.22% stake held by Japan’s Sumitomo Mitsui Banking Corp. This partnership provides a layer of stability as the bank navigates the complex regulatory and financial adjustments required by the recent court ruling. Management continues to monitor these evolving capital dynamics. ## Sources covering this story - https://www.livemint.com/industry/banking/yes-bank-at1-bond-cash-outflow-ceo-tonse-11792387324124.html — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._