Yes Bank — Q4 FY26 earnings call

Call held 18 Apr 2026

Management summary

Yes Bank reported a strong Q4 and full-year FY26 performance, marked by robust growth in advances and deposits, significant improvement in asset quality with GNPA/NNPA at multi-quarter lows, and enhanced profitability metrics including a 1% ROA for the quarter. The bank also demonstrated improved efficiency with a lower Cost-to-Income Ratio and outlined clear growth targets across segments for the upcoming fiscal year.

Highlights

  • Net Profit for Q4 FY26 was INR 1,068 crores, reflecting a strong growth of approximately 44.7% over the Net Profit of INR 738 crores in Q4 FY25.

  • ROA for Q4 FY26 reached 1%, indicating improved operating performance.

  • Total Advances registered a growth of 11.1% year-on-year to INR 2.73 lakh crores, with Retail disbursements growing approximately 41% year-on-year in Q4 FY26.

  • Total Deposits increased 12.1% year-on-year to INR 3.18 lakh crores, and CASA balances grew 14.9% year-on-year to INR 1.12 lakh crores, with CASA ratio improving to 35.1%.

  • Gross NPA and Net NPA ratios stood at 1.3% and 0.2% respectively, the lowest ever in 24 quarters, and Provision Coverage Ratio remained healthy at 81.9%.

  • Cost-to-Income Ratio for FY26 improved significantly to 66.7% versus 71.3% in FY25, with an even lower exit rate of 63% for Q4 FY26.

Concerns

  • AT1 bonds case adverse judgment

Key financials

2 periods

Headline

  • Net Profit
    ₹1,068 Cr
    YoY +44.7%
  • ROA
    1%
  • NII
    ₹2,638 Cr
    YoY +15.9%
  • NIM
    2.7%
    YoY +0.2% QoQ +0.1%
  • Total Advances Growth
    11.1%
    YoY +11.1%
  • Total Deposits Growth
    12.1%
    YoY +12.1%
  • CASA Ratio
    35.1%
    YoY +0.8% QoQ +1.1%
  • Gross NPA
    1.3%
  • Net NPA
    0.2%

FY26

  • Cost-to-Income Ratio
    66.7%

What they filed

Q1 FY27: revenue up 5.9%, net profit up 32.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue7,737 7,833 7,623 7,605 7,389 −4%7,553 −4%7,662 +1%8,054 +6%
Net profit567 619 745 809 664 +17%957 +55%1,082 +45%1,072 +33%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Deposits

  • RIDF and other mandated Deposits as % of Total Assets Deposits · by fiscal '27 · High confidence below 5%

    From 6% today

    Going forward, the Bank remains well on track to reduce these Deposit balances to below 5% by fiscal '27, which will aid our margins and Profitability.

    — Niranjan Banodkar

Advances Growth

  • Overall Loan Book Growth Advances Growth · next year · Medium confidence 14% to 15%
    we should certainly aim to grow in line with the industry, if not more, and that ball broadly anchors around the 14% to 15% range.

    — Niranjan Banodkar

  • Retail Loan Book Growth Advances Growth · next year · Medium confidence 10% to 11%
    what we are aiming to grow the Retail Book next year is actually should hit the double-digit growth. So, let's say, about 10% to 11% is what we do believe it should deliver.

    — Niranjan Banodkar

  • Corporate Book Growth Advances Growth · next year · Medium confidence 20%
    If I look at the Corporate Book, that's already growing at about 20%. So, we do believe we have the levers to grow at 20%.

    — Niranjan Banodkar

  • Commercial Banking Growth Advances Growth · next year · Medium confidence 18%
    Commercial Banking is something that is a space we like. Historically has been a good growth driver for us, and that continues to also deliver about 18% growth.

    — Niranjan Banodkar

RIDF Reduction

  • RIDF Reduction Amount RIDF Reduction · by end of March '27 · High confidence INR 6,500 crores to INR 9,000 crores
    we think that next year, at a minimum, the reduction should be about INR 6,500 crores. That could also go as high as INR 9,000 crores by the end of March '27.

    — Niranjan Banodkar

Branch Expansion

  • New Branches per annum Branch Expansion · next 4 to 5 years · High confidence around 80
    we had laid out a guidance for the next 4 to 5 years with a plan of around 400 branches with an average of around 80 branches per annum, and we are on course of that. We opened around 82 branches last year.

    — Rajan Pental

Profitability

  • ROA Improvement from core construct Profitability · over the next year or two · Medium confidence 25 to 30 basis points
    our objective internally is really to drive 25, 30 basis points of improvement from our core construct, right, where we get the margins higher, get our cost structure higher, get our fees higher.

    — Niranjan Banodkar

NIM

  • NIM Range NIM · over a 2 to 3 year period · Medium confidence 3.25% to 3.5%
    structurally over a 3-year period, let's say, now about 2 to 3 year period, we do believe that we will want to get into a 3.25% to 3.5% kind of a range from a margin perspective.

    — Niranjan Banodkar

ARC Recoveries

  • Recoveries from SRs ARC Recoveries · in FY27 · High confidence INR 800 crores to INR 1,000 crores
    In line with the rundown in the face value of the Security Receipts, we expect recoveries to the tune of INR 800 crores to INR 1,000 crores from SRs in FY27.

    — Niranjan Banodkar

What to watch in Q1 FY27

Overall Loan Book Growth

next year (FY27)
Current 11.1% YoY
Target 14-15% range

Why it matters

To verify if the bank can achieve its stated growth acceleration in line with industry expectations.

we should certainly aim to grow in line with the industry, if not more, and that ball broadly anchors around the 14% to 15% range.

Risks & concerns

  • AT1 bonds case adverse judgment

    high

    Management stated the matter is subjudice and reserved for judgment, refraining from commenting on potential impact until the Supreme Court verdict is out.

    Analyst not addressed

  • West Asia war impact on MSME segment

    medium

    Manish Jain stated proactive monitoring, clients managing well, no stress signs, but will continue to watch due to potential inflation and second-order impacts.

    Analyst acknowledged

Q&A highlights

7 direct
Growth outlook for next year and segment-wise targets Direct
we should certainly aim to grow in line with the industry, if not more, and that ball broadly anchors around the 14% to 15% range... Retail Book next year is actually should hit the double-digit growth. So, let's say, about 10% to 11%... Corporate Book, that's already growing at about 20%... Commercial Banking... continues to also deliver about 18% growth.

Provides specific growth targets for overall loan book and key segments for the upcoming fiscal year.

Asked by Jayant Kharote

CASA growth in Q4 FY26 Direct
on both CA and SA have sequentially grown in the range of about 4%. In fact, CA sequential growth has been slightly more than 4%, but blended is about 4%. And if I actually look at Term Deposits growth, and I'm excluding the CDs that we ended up raising as well, the Term Deposits also have grown big picture at about 4%.

Clarifies the sequential and year-on-year growth rates for CASA and Term Deposits, indicating deposit franchise strength.

Asked by Jayant Kharote

Margin expansion trajectory and RIDF rundown Direct
we think that next year, at a minimum, the reduction should be about INR 6,500 crores. That could also go as high as INR 9,000 crores by the end of March '27.

Details the expected reduction in RIDF and its positive implications for future margin expansion.

Asked by Jayant Kharote

Loan mix change with SMBC induction Direct
if I look at the Corporate Book, that's already growing at about 20%... Commercial Banking... continues to also deliver about 18% growth... Retail Book next year is actually should hit the double-digit growth. So, let's say, about 10% to 11%... I think we will anchor around a reasonably similar mix composition that we have right now.

Addresses whether the loan mix will change with the new shareholder, indicating a continuation of the current segment growth focus.

Asked by Jai Mundhra

MTM on investment book and AFS reserves Direct
The AFS reserve, we have a negative balance of about INR 100 crores as of March 31. The swing would be about INR 200 crores.

Provides specific figures for the AFS reserve and its movement, clarifying the impact of bond yield changes.

Asked by Jai Mundhra

ROA trajectory and contingent provisioning Direct
we did realize that there are sometimes evolving and possibly even prudent provisioning policies. And that application we have done in quarter 4 of this year, which translates to about INR 341 crores... our objective internally is really to drive 25, 30 basis points of improvement from our core construct.

Explains the rationale behind the one-time provisioning and outlines the strategy for further ROA improvement from core operations.

Asked by Jai Mundhra

Branch expansion strategy and Retail Disbursements contribution Direct
we had laid out a guidance for the next 4 to 5 years with a plan of around 400 branches with an average of around 80 branches per annum... Our internal customer sourcing is approximately 50% of the overall disbursals we do. Out of that, approximately 60% actually comes from the branches through the branch customers.

Details the branch expansion plan and the significant contribution of branches to retail customer sourcing and disbursements.

Asked by Advait Date

AT1 bonds case update and potential impact Partial
on the AT1 matter, this matter is subjudice, as you all know. The hearings have taken place at the Supreme Court, and the matter is also reserved for judgment. We will wait to hear from the Supreme Court... I would refrain from passing a judgment on what we expect.

Addresses a significant regulatory and financial risk, though management defers comment on potential impact pending the Supreme Court verdict.

Asked by Amit Varma

2 min read 6 chapters

Detailed narrative

Q4 & FY26 Financial Performance Highlights

Yes Bank delivered a strong Q4 FY26, with Net Profit growing 44.7% year-on-year to INR 1,068 crores, achieving a Return on Assets (ROA) of 1% for the quarter. For the full year FY26, Net Profit stood at INR 3,476 crores, up 44.5% over FY25, with an ROA of 0.8%. Net Interest Income (NII) for Q4 FY26 was INR 2,638 crores, marking a 15.9% year-on-year increase, while full-year NII grew 9.3% to INR 9,776 crores.

Asset Quality and Provisioning Strategy

The bank's asset quality continued to strengthen, with Gross NPA at 1.3% and Net NPA at 0.2% as of March 31, 2026, representing the lowest levels in 24 quarters. The Provision Coverage Ratio (PCR) remained healthy at 81.9%. Gross slippage ratio improved to 1.8% for FY26 from 2.1% in FY25, with Retail Asset Slippages also declining to 3.5% from 4%. The bank made a prudent, proactive contingent provisioning of INR 341 crores in Q4, which management clarified was not due to an underlying credit issue but a conservative policy.

Deposit Franchise and CASA Growth

Yes Bank achieved significant milestones in its deposit franchise, with Total Deposits crossing INR 3 lakh crores to reach INR 3.18 lakh crores, a 12.1% year-on-year growth. CASA balances also surpassed INR 1 lakh crores, growing 14.9% year-on-year to INR 1.12 lakh crores. The CASA ratio improved by 80 basis points year-on-year and 110 basis points quarter-on-quarter, reaching 35.1%, driven by strong retail and branch-led contributions.

Credit Growth and Segment Mix

Total Advances grew 11.1% year-on-year to INR 2.73 lakh crores. Retail disbursements showed strong momentum, growing approximately 41% year-on-year in Q4 FY26. Management guided for overall loan book growth in the 14-15% range for the next year, with specific targets of 10-11% for Retail, 20% for Corporate, and 18% for Commercial Banking, indicating a balanced growth strategy across segments.

Efficiency and Cost Management

The Cost-to-Income Ratio for FY26 saw a significant improvement to 66.7% from 71.3% in FY25. The exit rate for Q4 FY26 was even lower at 63%, compared to 66.1% in Q3 FY26 and 67.3% in Q4 FY25. This improvement was attributed to income growth outpacing expense growth, reflecting sustained expansion in operating jaws and a focus on productivity.

Outlook on Margins and ROA

Net Interest Margin (NIM) improved by 10 basis points quarter-on-quarter and 20 basis points year-on-year to 2.7% in Q4 FY26. The bank aims to improve its core ROA by 25-30 basis points from its current construct over the next year or two, driven by higher margins, better cost structure, and increased fees. Management also expects NIM to reach a range of 3.25% to 3.5% over a 2-3 year period, significantly aided by the continued rundown of RIDF and other mandated deposits.

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