YES Bank profit jumps 65%, watch this closely!!

YES Bank profit jumps 65%, but ₹5,217 crore AT-1 bond risk remains YES Bank reported a 65% year-on-year increase in standalone net profit to ₹1,080 crore for Q2 FY27, compared with ₹654 crore in the corresponding quarter last year. Net interest income (NII) increased 22.7% to approximately ₹2,822 crore. Advances grew 23.7% to ₹3.10 lakh crore, while deposits increased 19.5% to ₹3.54 lakh crore. However, the results come with a major legal and financial uncertainty. The Supreme Court ruling overturning the 2020 write-off of ₹8,415 crore in Additional Tier-1 (AT-1) bonds has not been reflected in the reported results. YES Bank disclosed that recognising the ruling's impact could result in a ₹5,217 crore quarterly net loss on a pro forma basis. The bank is evaluating the judgment and available legal remedies. The bank's operating performance improved, but the AT-1 bond issue creates uncertainty that investors cannot ignore. Higher core income: NII growth indicates improved interest earnings after interest expenses. Better asset quality: The gross NPA ratio improved to 1.2%, compared with 1.6% a year earlier. Strong lending growth: Advances increased 23.7%, supporting the bank's business expansion. Legal uncertainty: The potential financial impact of the AT-1 ruling could materially affect reported profitability and net worth if recognised.