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YES Bank has strong reasons for preferring an appeal before the Supreme Court against the Bombay High Court judgment which set aside its decision to write down Additional Tier (AT)-1 Bonds aggregating ₹8,400 crore, according to Prashant Kumar, MD & CEO.
The Bombay High Court had set aside the order by the YES Bank’s administrator directing the bank’s AT-1 bonds be written-down as part of its reconstruction.
“The Bank is in receipt of legal opinion, which gives us very strong reasons for preferring an appeal before the Supreme Court.
“We have very strong legal opinion in our favour and at this point of time, there is no need to make any contingent provisions in our balance sheet,” Kumar said in the bank’s earnings call.
Read also: ‘YES Bank will explore inorganic growth options’
He underscored that there is no immediate impact of the judgment on the bank.
Kumar observed that the bank made a request to the Bombay High Court to give it time to make an appeal in the Supreme Court (SC). The High Court gave the bank six weeks to make an appeal in the SC and for the next six weeks the HC’s Order has been kept in abeyance.
On the possible impact of the judgment on the bank, he said: “Fundamentally, if you see, it is more in terms of AT-1 bonds. So, there is no inflow or outflow of any money or liquidity. It would be a change between CET (common equity tier-I capital) and AT-1. CET would come down and AT-1 would be there. Both are part of Tier-I capital. So, there would not be any impact on the overall capital position.”
Q3 numbers
Meanwhile, YES Bank reported a 80 per cent decline in third quarter net profit at ₹52 crore against ₹266 crore in the year ago quarter due to a sharp rise in provisions for investments.
Provisions for investments jumped about nine times to ₹2,902 crore against ₹312 crore in the year ago quarter.
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