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AT1 Bond Impact: YES Bank evaluates capital actions to counter CET1 compression

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AT1 Bond Impact: YES Bank evaluates capital actions to counter CET1 compression

AT1 Bond Impact: YES Bank evaluates capital actions to counter CET1 compression

YES Bank is evaluating capital actions, including a potential capital raise, after the Supreme Court’s judgment on its Rs 8,415-crore AT1 bonds, with CFO Niranjan Banodkar saying pro-forma CET1 of 11.4% is not ideal, although it would still provide headroom for growth.

* YES Bank CEO Vinay Tonse said reinstatement of AT1 principal is expected to have an indicative impact of around 240 basis points on CET1, including profits. * CFO Niranjan Banodkar said the bank will evaluate capital actions, including a raise, but will assess quantum, value and pricing carefully to protect stakeholders. * The bank’s pro-forma CET1 stands at 11.4%, versus 13.7% reported, while Tonse said overall Tier 1 capital would remain around 13.7% on a pro-forma basis. * Niranjan said the AT1 reinstatement is substantively a balance-sheet change involving reserves, with no repayment or cash outflow. * Treatment and timing of the reinstated bonds and coupons remain under assessment, with the information memoranda and Supreme Court judgment guiding the coupon decision.

4% is “not ideal” for the bank. 7% as of September 30. Based on its current assessment of the Supreme Court judgment, MD & CEO Vinay Tonse said reinstatement of the AT1 principal amount is expected to have an indicative impact of approximately 240 basis points on CET1, including profits.



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