Yes Bank capital adequate after AT1 ruling but earnings hit looms

The reinstatement is an earnings negative to the Indian bank, S&P said.

Yes Bank is expected to remain adequately capitalized after the Supreme Court of India ruled that the bank’s write-off of its additional Tier 1 (AT1) bonds was illegal, said S&P Global Ratings.

However, the reinstatement is an “earnings negative” to the Indian lender given the AT1’s high couple payments of between 9% to 9.5%.

“We do not anticipate any meaningful impact on our total adjusted capital,” the credit rating company said in a report on 15 October 2026.

S&P expects a negative impact of $886.58m (INR84b) to common equity, although it would be largely offset by the reinstatement of the AT1 instruments, it said.

The supreme court ruling was likely due to Yes Bank’s procedural lapses in the write-down process, S&P said. It is unclear whether Yes Bank will challenge the ruling.

“We currently do not expect material impact of this on the bank’s credit profile but will continue to monitor any related developments,” S&P said, adding that Yes Bank’s regulator capital is adequate with a common equity tier 1 (CET1) ratio of 13.87%.

(US$1 = INR 94.75, as of 16 October 2026)