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

Introduction to Q3 Performance

Yes Bank announced a robust financial performance for the third quarter of fiscal year 2026, with standalone net profit surging by 55.4% year-on-year to ₹952 crore. This compares favorably to the ₹612.3 crore profit reported in the same quarter of the previous fiscal year. The significant growth was primarily driven by a healthy increase in net interest income, stable non-interest income, and a sharp reduction in provisions, underscoring the bank's strengthening operational efficiency and asset quality.

Detailed Financial Breakdown

The bank's Net Interest Income (NII) for the quarter ended December 31, 2025, grew by 10.9% year-on-year to ₹2,466 crore. This growth was supported by a reduction in the cost of funds and an expansion in margins. Non-interest income also contributed positively, rising 8% year-on-year to ₹1,633 crore, led by core fee income from credit cards and third-party product distribution. Consequently, the bank's total income for the quarter increased by 9.7% from the previous year to ₹4,098 crore.

Operational Efficiency and Profitability

Operating expenses for the quarter rose by 7.8% year-on-year to ₹2,865 crore. This figure includes a one-time provision of ₹155 crore for gratuity linked to new labor codes. Excluding this impact, the cost growth was well-contained. The bank's operating profit stood at ₹1,234 crore, a 14.3% increase year-on-year. When adjusted for the gratuity provision, the operating profit showed a more substantial rise of 28.7% to ₹1,389 crore. The cost-to-income ratio saw a significant improvement, declining to 66.1% from 71.1% a year ago, reflecting better expense management.

Strengthening Asset Quality

A key highlight of the quarter was the marked improvement in asset quality. The Gross Non-Performing Assets (GNPA) ratio declined to 1.5%, down 10 basis points both year-on-year and quarter-on-quarter. The Net Non-Performing Assets (NNPA) ratio improved to 0.3%, a reduction of 20 basis points from the previous year. This was supported by a sharp fall in provisions to just ₹22 crore for the quarter, compared to ₹259 crore in the same period last year. The Provision Coverage Ratio (PCR) strengthened considerably to 83.3% from 71.2% in Q3 FY25, providing a stronger buffer against potential credit losses.

Balance Sheet and Business Growth

Yes Bank's balance sheet showed steady growth. Net advances increased by 5.2% year-on-year to ₹2,57,451 crore, with momentum seen across retail, MSME, and corporate segments. Total disbursements for the quarter stood at ₹26,982 crore, up 7% year-on-year, with retail asset disbursements growing by nearly 15%. On the liabilities side, total deposits grew by 5.5% year-on-year to ₹2,92,524 crore. Low-cost Current Account and Savings Account (CASA) deposits performed particularly well, rising 8.5% to ₹99,483 crore, which pushed the CASA ratio up to 34%.

Management Commentary

Prashant Kumar, Managing Director & CEO of Yes Bank, described the quarter as a "breakthrough period" for the bank. He highlighted the combination of accelerated profitability, sharp improvement in asset quality, and strong business momentum. He noted that the bank's Return on Assets (RoA), excluding the one-time gratuity impact, reached the 1.0% milestone for the first time since its reconstruction. Kumar also pointed to the industry-wide challenge of deposit growth but expressed confidence in the bank's strategy to navigate this environment through its strong CASA performance.

Strategic Milestones and Market Reaction

During the quarter, Yes Bank was included in the NIFTY Bank Index, a significant development reflecting increased investor confidence. The bank also continued its physical expansion, opening 33 new branches, bringing the total for the first nine months of the fiscal year to 76. Ahead of the results announcement, shares of Yes Bank closed at ₹23.46 on January 16, 2026, marking a gain of 2.22%.

Conclusion

Yes Bank's Q3 FY26 results demonstrate a solid turnaround, with strong profitability and a significantly healthier balance sheet. The improvements in asset quality, controlled costs, and steady business growth position the bank well for the future. The management remains focused on its strategic objectives of building a resilient and high-quality franchise that can deliver long-term value to its stakeholders.