Private lender Yes Bank said on Saturday it had “strong reason” to appeal to the Supreme Court against the Bombay High Court order upholding the RBI-appointed administrator’s 2020 decision to write off the additional Tier I bonds (AT1) had set aside valued at Rs 8,400 crore.
“The judgment itself does not call into question the regulatory requirements for writing down (AT1) bonds. I think there are questions regarding the process,” the bank’s managing director and CEO Prashant Kumar told reporters.
“The bank has received a legal opinion, which gives us very strong reason to bring forward an appeal to the Hon’ble Supreme Court,” he added.
The lender on the verge of collapse, a. New management and a new Board of Directors were appointed as part of a rescue plan devised by RBI. The RBI allowed a Rs 8,400 crore write-down on AT1 bonds issued by Yes Bank after it was bailed out by the State Bank of India (SBI).
When asked about the implications of the order, Kumar said there was no immediate impact as the Bombay High Court had given the bank six weeks to appeal to the Supreme Court.
“At this point in time, there is no need to make contingency provisions on our balance sheet,” added Kumar.
For the quarter ending December 2022, the bank reported an 81 per cent fall in its after-tax standalone profit to Rs.52 crore compared to Rs.266 crore in the corresponding quarter of the previous financial year.
Earnings were significantly influenced by age-related provisions. Its provisions increased to Rs.845 crore in the quarter ended December 2022 from Rs.375 crore in the same period last year. Its Net Interest Income (NII) grew 11.7 per cent to Rs 1,971 crore. The net interest margin was 2.5 percent.
Following the transfer of stressed assets to JC Flower ARC, the bank’s gross non-performing assets (GNPA) fell from 14.7 percent to 2 percent. Net NPA was 1 percent compared to 5.3 percent in Q3FY22.
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