Yes Bank Capital Ratios Face Pressure After AT1 Bond Ruling
· Business · Economic Times
Yes Bank expects its Common Equity Tier 1 capital ratio to drop by over two percentage points to 11.4% following a Supreme Court ruling that voided the 2020 write-down of additional Tier 1 bonds. The bank's stock has fallen 17% since the court's October 15 decision, which reversed a key measure from the lender's 2020 reconstruction. Management stated that the bank remains above the minimum regulatory capital requirements, with the overall Tier 1 ratio expected to hold near 13.7%. While the lender is not required to make immediate cash payments, the Rs 8,415 crore bond principal must be reclassified from reserves to liabilities. The bank is currently evaluating legal options and potential capital measures to support its long-term growth objectives.
Why it matters
The ruling creates a significant accounting shift for Yes Bank and potential financial obligations that may require the lender to raise new capital, impacting its growth plans and shareholder value.
Read the original report — Economic Times
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