Yes Bank

YES Bank reported a strong Net Profit of INR 952 crores for Q3 FY26, marking a 55% Y-o-Y and 45% Q-o-Q growth. The annualized Return on Assets (ROA) improved significantly to 0.9% from 0.6% in the previous quarter and the corresponding quarter last year. Adjusting for a one-time^📎 gratuity provision of INR 155 crores, the adjusted Net Profit would have been INR 1,068 crores, translating to an annualized ROA of 1%. The bank aims for a 1% ROA by the exit quarter of FY26 and for the full year of FY27, with a mid-term target of 1.5%.

Asset quality continued to improve, with Gross NPAs declining to 1.5% from 1.6% in the previous quarter, while Net NPAs remained stable at 0.3%. The Provision Coverage Ratio (PCR) strengthened to 83.3% from 81% in Q2 FY26 and 71.2% in Q3 FY25. Fresh slippages were contained at INR 1,050 crores, the lowest in eight quarters, resulting in a Slippage Ratio of 1.6%. Recoveries and upgrades totaled INR 1,224 crores, including INR 555 crores from Security Receipts (SRs) in Q3, bringing cumulative SR recoveries for FY26 to INR 1,113 crores against a guidance of INR 1,200 crores.

The bank's deposit franchise demonstrated healthy momentum, with End-of-Period (EOP) Deposits growing 5.5% to INR 2.93 lakh crores. Retail Deposits grew 12% Y-o-Y, driven by robust growth in Retail Current Account (19.4% Y-o-Y) and Retail Saving Account (16.3% Y-o-Y). This granular growth, coupled with proactive rate actions, led to a reduction in the Cost of Deposits to 5.6% from 6.1% last year, and the overall Cost of Funds to 5.9% from 6.5% last year, contributing to NIM expansion.

Total Advances stood at INR 2.57 lakh crores, with a sequential growth of 2.9% and Y-o-Y growth of 5.2%. The advances mix comprised approximately 47% Retail, and 26-27% each for Commercial and CIB segments. The bank is strategically focusing on profitable growth, avoiding aggressive expansion in low-yielding segments like Home Loans, new Car Loans, and Gold Loans. The Commercial Banking segment continues to show robust growth, and the SME segment, which constitutes 29.3% of total advances, is a key growth driver.

Net Interest Margin (NIM) expanded to 2.6% in Q3 FY26, a 12 bps increase QoQ and 24 bps YoY. This expansion was driven by the structural rundown of legacy RIDF balances, which reduced to 6.9% of total assets, and an improved funding mix. The Cost-to-Income ratio (adjusted for gratuity) improved to 66.1% from 67.1% in Q2, reflecting strong operational efficiency and controlled operating expense growth, which is among the lowest in the industry despite continued investments in branch network and digital capabilities.

YES Bank expanded its branch network to 1,328 branches by adding 33 new branches in Q3, totaling 76 new branches in the first nine months of FY26. This expansion is yielding significant results, with internal sourcing from branches now accounting for approximately 52% of Retail Asset disbursements, up from 37% two years ago. The bank continues to invest in digital capabilities and sees its investments reaching an inflection point, contributing to future growth and efficiency.