Yes Bank Q3 Profit Jumps 55% to ₹952 Crore in FY26

Introduction

Yes Bank announced a strong performance for the third quarter of fiscal year 2026, with its standalone net profit rising by 55.4% year-on-year (YoY) to ₹952 crore. The Mumbai-based private lender's robust bottom line was primarily driven by a significant reduction in provisions for bad loans, stable growth in core income, and a consistent improvement in asset quality. The results indicate a sustained recovery and strengthening of the bank's financial health, marking a significant period of growth since its reconstruction.

Detailed Financial Performance

The bank's net profit also saw a sequential increase of 45.4% from ₹654 crore in the second quarter of FY26. Net Interest Income (NII), a key measure of core profitability, grew by 10.9% YoY to ₹2,466 crore. This growth was supported by a reduction in the cost of funds. Non-interest income contributed ₹1,633 crore to the total, an increase of 8% compared to the same quarter last year. Consequently, the bank's total income for the quarter stood at ₹4,098 crore, up 9.7% YoY.

Operating expenses for the quarter rose by 7.8% YoY to ₹2,865 crore. This figure includes a one-time gratuity provision of ₹155 crore related to new labour codes. Excluding this impact, the cost growth was well-managed. The operating profit came in at ₹1,234 crore, a 14.3% YoY increase. When adjusted for the gratuity provision, the operating profit showed a more substantial rise of 28.7% YoY to ₹1,389 crore.

Provisions and Profitability Metrics

A standout feature of the quarter was the sharp decline in provisions and contingencies, which fell by 91.5% annually to just ₹22 crore from ₹259 crore a year earlier. This drastic reduction significantly boosted the profit before tax, which jumped 47.7% YoY to ₹1,212 crore. The bank's Net Interest Margin (NIM) expanded to 2.6%, an improvement of 20 basis points YoY and 10 basis points sequentially. The cost-to-income ratio also improved, falling to 66.1% from 71.1% in the corresponding quarter of the previous year.

Asset Quality Strengthens

Yes Bank continued to show marked improvement in its asset quality. The Gross Non-Performing Asset (GNPA) ratio declined to 1.5% of total advances, down 10 basis points both YoY and QoQ. The Net Non-Performing Asset (NNPA) ratio improved to 0.3%, a reduction of 20 basis points from the previous year. The Provision Coverage Ratio (PCR) strengthened to 83.3%, up from 71.2% in Q3 FY25, indicating a healthier buffer against potential loan losses. Gross slippages for the quarter were contained at ₹1,050 crore, or 1.6% of advances, with retail slippages reaching a seven-quarter low. Recoveries and upgrades remained strong at ₹1,224 crore.

Key Financial Highlights (Q3 FY26 vs Q3 FY25)

Balance Sheet and Business Growth

The bank's balance sheet also reflected steady growth. Net advances increased by 5.2% YoY to reach ₹2,57,451 crore. Total deposits grew by 5.5% YoY to ₹2,92,524 crore. The Current Account Savings Account (CASA) deposits saw an 8.5% YoY increase to ₹99,483 crore, leading to a CASA ratio of 34.0%. Total disbursements for the quarter were robust at ₹26,982 crore, up 7% YoY, led by strong momentum in the retail assets segment.

Management Commentary

Prashant Kumar, Managing Director and CEO of Yes Bank, described the quarter as a "breakthrough period." He highlighted the acceleration in profitability, sharp improvement in asset quality, and strong business volumes. He noted that the quarterly Return on Assets (RoA), excluding the one-off gratuity impact, reached 1.0% for the first time since the bank's reconstruction. This was attributed to higher NIMs, buoyant fee income, and disciplined cost control.

Market Reaction and Outlook

Following the announcement of the strong quarterly results, the shares of Yes Bank rose 2.22% to settle at ₹23.46 on January 16, 2026. The bank's performance in the December quarter reinforces its recovery trajectory. The focus going forward will be on maintaining the momentum in loan growth, sustaining margin improvements, and ensuring continued stability in asset quality. The bank also continued its physical expansion, opening 33 new branches during the quarter, bringing it closer to its full-year target.