Yes Bank Reports 65% Surge in Q2 Profit to ₹1,080 Crore

Yes Bank has announced a remarkable 65% increase in its standalone net profit for the second quarter of FY27, reaching ₹1,080 crore. This growth is attributed to a rise in net interest income and a reduction in provisions. However, the reported figures do not account for the possible financial repercussions stemming from the Supreme Court's recent ruling regarding the write-down of Additional Tier-1 (AT1) bonds, which could potentially impact the bank's financial standing significantly.

In the same quarter last year, the bank's profit was ₹654 crore, and it saw a slight sequential increase of 0.8% from ₹1,071 crore in the previous quarter. For the first half of FY27, the profit surged by 47.8%, amounting to ₹2,151 crore compared to ₹1,456 crore in the corresponding period of the previous year. This robust performance reflects the bank's strategic focus on enhancing its core banking operations.

The bank's net interest income (NII) rose to ₹2,822 crore, marking a 22.7% year-on-year increase from ₹2,301 crore. Interest income also saw a significant rise of 17.1%, reaching ₹8,640 crore. Advances grew by 17.2% to ₹6,600 crore, while interest expenses increased by 14.6% to ₹5,817 crore. Additionally, operating profit before provisions and contingencies climbed by 29.4% to ₹1,678 crore, while provisions fell by 24.2% to ₹317 crore.

In terms of asset quality, Yes Bank reported a gross non-performing assets (NPAs) figure of ₹3,875 crore, down from ₹4,055 crore a year earlier, improving the gross NPA ratio to 1.2% from 1.6%. The net NPA ratio also decreased to 0.2% from 0.3%. The bank's capital adequacy ratio was reported at 14.5%, slightly lower than the previous year's 15%. The Supreme Court's ruling on October 15 upheld a prior judgment that annulled the March 2020 write-down of AT1 bonds, prompting Yes Bank to assess the implications and potential legal remedies.

Looking ahead, Yes Bank is currently evaluating the financial impact of the Supreme Court ruling, which, if recognized, could lead to a net loss of ₹5,217 crore for the quarter. The bank has not included this potential loss in its reported results, and its auditors have issued a qualified review conclusion regarding this matter. As the bank navigates these challenges, stakeholders will be closely monitoring its next steps and any forthcoming disclosures regarding the AT1 bond situation.