The Supreme Court's ruling on Yes Bank's additional tier 1 (AT1) bonds is expected to impact the lender's capital ratio and profitability, Moody's Ratings said in a release enclosed in the bank's exchange filing on Tuesday, reported by ANI on October 20, 2026 and summarised from the regulatory filing by FilingReader the same day.
The October 15 Supreme Court ruling set aside the bank's 2020 write-down of AT1 securities worth ₹8,415 crore (yaani ₹8,415 crore = about $884 million) issued during its reconstruction, and ordered their reinstatement. Management estimates the bank's Common Equity Tier 1 (CET1) ratio will decline to 11.4% from 13.7% on a pro forma basis as of September 2026, Moody's said.
Moody's affirmed Yes Bank's long-term foreign and local currency deposit ratings at Ba1 and maintained a stable outlook despite the expected decline in core capital. The Tier 1 capital ratio is expected to remain unchanged, the agency said, as the reinstated bonds will continue to count towards regulatory capital adequacy.
The impact of the lower CET1 ratio would be mitigated by improvements in the bank's funding profile, asset quality and profitability, Moody's added, noting gross non-performing loans had fallen to 1.2% as of September 2026 and the liquidity coverage ratio stood at 131%. 'We expect Yes Bank to replenish its capital buffers by raising new equity capital to a level that is sufficient to support loan growth, while strengthening its loss absorbing buffers,' Moody's said. The bank, in its recent earnings call reported separately, said it sees no immediate need to raise capital and is assessing the accounting treatment and legal options.
SC ruling: October 15, set aside 2020 AT1 write-down of ₹8,415 crore • CET1: 13.7% → 11.4% pro forma (Sept 2026) • Moody's: Ba1 affirmed, stable outlook • Gross NPA 1.2%, liquidity coverage 131%
Sources: ANI via Latestly (October 20, 2026); Moody's release in Yes Bank exchange filing, via FilingReader (October 20, 2026).