Yes Bank reported a 65% year-on-year rise in standalone net profit to Rs 1,080 crore for the second quarter of FY27. This growth came from higher net interest income and lower provisions. However, these results do not include the financial impact of the Supreme Court’s ruling on AT1 bonds worth Rs 8,415 crore.
Private sector lender Yes Bank reported a 65% year-on-year rise in standalone net profit to Rs 1,080 crore for the second quarter of FY27, driven by higher net interest income and lower provisions. However, the results do not reflect the potential financial impact of the Supreme Court’s ruling on the bank’s write-down of Additional Tier-1 (AT1) bonds worth Rs 8,415 crore. The bank’s pro forma disclosure indicated a potential net loss of Rs 5,217 crore for the quarter if the estimated impact were recognised.
Net profit rose from Rs 654 crore in the year-ago quarter and was up 0.8% sequentially from Rs 1,071 crore in Q1FY27. For the first half of FY27, profit increased 47.8% to Rs 2,151 crore from Rs 1,456 crore a year earlier.
Net interest income (NII) rose 22.7% year-on-year to Rs 2,822 crore from Rs 2,301 crore, while interest income increased 17.1% to Rs 8,640 crore. Interest on advances grew 17.2% to Rs 6,600 crore, while interest expenses rose 14.6% to Rs 5,817 crore.
Operating profit before provisions and contingencies increased 29.4% to Rs 1,678 crore. Provisions and contingencies fell 24.2% year-on-year to Rs 317 crore from Rs 419 crore and were down 19.5% sequentially. Other income rose 14.4% to Rs 1,882 crore.
Deposits and asset quality
Gross non-performing assets (NPAs) stood at Rs 3,875 crore, against Rs 4,055 crore a year earlier. The gross NPA ratio improved to 1.2% from 1.6%, while the net NPA ratio fell to 0.2% from 0.3%. The capital adequacy ratio stood at 14.5%, compared with 15% a year earlier.
The Supreme Court on October 15 upheld the Bombay High Court judgment setting aside the March 2020 write-down of the AT1 bonds and dismissed the appeals against it. Yes Bank said it was evaluating the judgment’s implications, implementation and available legal remedies. The bank has not recognised the impact in its reported results, and its joint statutory auditors issued a qualified review conclusion on the matter.
The bank’s pro forma disclosure showed a net loss of Rs 5,217 crore for Q2FY27 and Rs 4,146 crore for the first half of FY27 if the impact had been recognised. Under this scenario, net worth would have stood at Rs 46,970 crore, borrowings at Rs 86,149 crore and return on assets at minus 4.3% for the quarter. The capital adequacy ratio would have remained at 14.5%.