Yes Bank Q3 FY26 results: Net profit jumps 55% YoY to Rs 952 crore; asset quality, margins improve

Yes Bank

• Yes Bank Q3 net profit rose 55.4 percent YoY to Rs 952 crore
• Asset quality improved with GNPA ratio down to 1.5 percent
• Net interest income grew 10.9 percent YoY to Rs 2,466 crore

Did our AI summary help?

Yes Bank on Saturday reported a strong improvement in profitability for the third quarter of FY26, with standalone net profit rising 55.4 percent year-on-year to Rs 952 crore, aided by higher net interest income, improved margins, lower credit costs and a sharp improvement in asset quality.

The private sector lender’s net profit also rose 45.4 percent sequentially from Rs 654 crore in the July-September quarter. Excluding the one-time impact of higher gratuity provisions following changes under the new labour codes, profit after tax stood at Rs 1,068 crore, up 74.4 percent on year, the bank said in a statement filed with the stock exchanges.

Ahead of the quarterly results, Yes Bank shares rose 2.2 percent to end at Rs 23.45 on NSE. The stock has gained over 28 percent in the last one year, taking the bank’s market capitalisation to over Rs 73,600 crore.

Core earnings strengthen

Net interest income (NII) for the quarter rose 10.9 percent year-on-year and 7.2 percent quarter-on-quarter to Rs 2,466 crore, supported by a steady improvement in margins and a lower cost of funds. Net interest margin (NIM) improved to 2.6 percent, compared with 2.4 percent a year earlier and 2.5 percent in the previous quarter.

Non-interest income increased 8 percent year-on-year to Rs 1,633 crore, led by growth in core fee income, which rose nearly 10 percent from a year earlier. Fee growth was driven by card fees, loan processing charges and higher income from third-party products such as insurance and investment distribution, according to the presentation.

Operating profit for the quarter stood at Rs 1,234 crore, up 14.3 percent year-on-year. Excluding the gratuity impact, operating profit rose 28.7 percent to Rs 1,389 crore, reflecting tight cost control despite a rise in reported operating expenses. The cost-to-income ratio, adjusted for the gratuity impact, improved to 66.1 percent from 71.1 percent in the year-ago quarter.

Credit costs fall sharply, asset quality improves

Provisioning declined sharply during the quarter, with non-tax provisions at Rs 22 crore, compared with Rs 259 crore in the year-ago period and Rs 419 crore in Q2 FY26. As a result, net credit costs for the quarter were negligible, Yes Bank said.

Return on assets (RoA) improved to 0.9 percent from 0.6 percent a year earlier, while return on equity (RoE) rose to 7.7 percent from 5.2 percent in Q3 FY25. Excluding the gratuity impact, RoA touched 1.0 percent during the quarter, a key milestone for the bank since its reconstruction, management said.

Yes Bank reported a further improvement in asset quality, with gross non-performing assets (GNPA) ratio declining to 1.5 percent as of December 31, 2025, from 1.6 percent in both the previous quarter and a year earlier. Net NPA ratio stood at 0.3 percent, flat sequentially and lower than 0.5 percent a year ago.

Provision coverage ratio (PCR) improved to 83.3 percent, compared with 71.2 percent in Q3 FY25 and 81 percent in the September quarter. Gross slippages declined to Rs 1,050 crore, or 1.6 percent of advances, the lowest level in eight quarters, while retail slippages fell to their lowest level in seven quarters.

Balance sheet growth remains steady

Net advances grew 5.2 percent year-on-year and 2.9 percent sequentially to Rs 2.57 lakh crore, led by growth in commercial banking, corporate and institutional banking, and credit cards. Retail asset disbursements rose about 15 percent year-on-year during the quarter, while total disbursements stood at Rs 26,982 crore.

Total deposits increased 5.5 percent year-on-year to Rs 2.93 lakh crore, with continued outperformance in low-cost deposits. CASA deposits rose 8.5 percent year-on-year, taking the CASA ratio to 34 percent, compared with 33.1 percent a year earlier. Retail and branch-led deposits grew 9 percent year-on-year, the bank said.

Commenting on the results, MD & CEO Prashant Kumar said, “Q3FY26 marks a breakthrough quarter for the Bank powered by a confluence of factors such as acceleration in profitability, sharp improvement in Asset Quality, gathering momentum in business volumes (disbursements) and continued industry-leading performance in CASA.”

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.