Yes Bank's operating improvement and a court-driven accounting problem are now sitting side by side. The Indian lender reported ₹1,080 crore of net profit for the quarter ended September 30, 2026, a 65% increase from a year earlier. But its October 17 investor presentation says those published results do not recognize the effect of a Supreme Court judgment concerning ₹8,415 crore of additional tier-1, or AT1, bonds written down during the bank's 2020 rescue. On an indicative, unaudited basis, including the estimated effect would turn the quarterly profit into a ₹5,217 crore loss.

Lending income improved

The bank's own figures show net interest income rising 22.7% year on year to ₹2,822 crore. Non-interest income increased 14.4% to ₹1,882 crore, while operating profit climbed 29.4% to ₹1,678 crore. Non-tax provisions fell to ₹317 crore from ₹419 crore a year before. Reuters independently reported the profit increase and the main lending-income and provision figures on October 17. These are the results as filed, before any AT1-related adjustment.

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Net advances reached ₹3,09,510 crore, up 23.7% year on year, and deposits grew 19.5% to ₹3,54,004 crore, according to the presentation. The gross non-performing asset ratio eased to 1.2% from 1.3% at the end of June; the net ratio was 0.2%. The bank noted that part of the advance and deposit expansion was associated with foreign-currency nonresident deposits and related lending. Stripping out the related foreign-currency term loans, it put annual advance growth at 17.6%, a more restrained gauge of underlying expansion.

The unbooked judgment

On October 15, India's Supreme Court upheld an earlier Bombay High Court decision setting aside the AT1 write-down. The dispute stems from Yes Bank's 2020 reconstruction, when the bonds were wiped out. AT1 securities are designed to absorb losses under specified stress conditions, but the legal question here concerned the authority and process for this particular write-down. The judgment's financial consequences remain under assessment by the bank; it is considering implementation, regulatory and accounting treatment, and available legal remedies.

Yes Bank disclosed both its filed result and an alternative illustration rather than booking an immediate charge. In the presentation, the pro forma net result is a ₹5,217 crore loss, compared with the reported ₹1,080 crore profit. Its common equity tier-1 ratio would be 11.4%, versus the reported 13.7%, under that illustration. Reuters said the bank was weighing possible further proceedings before the Supreme Court. The lender expressly cautioned that the estimates can change after consequential actions and final legal, accounting and regulatory decisions. They should not be described as its finalized earnings or capital position.

Why the distinction matters

For shareholders and bank creditors, the issue is not whether the September-quarter operating numbers improved; the filing indicates that they did. It is how much of that improvement survives the eventual treatment of the bond judgment, and when that treatment enters the accounts. A lower common-equity ratio could also affect the room available for future balance-sheet growth, even as the bank reported deposits and loans rising. Bondholders, meanwhile, await the practical consequences of the ruling. Yes Bank has not completed that process, so the reported profit and the provisional loss scenario must remain clearly separate until a definitive disclosure resolves the gap.

Sources

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