Yes Bank is back in the spotlight. In its April-June quarter results (Q1 FY26), the private sector lender reported a net profit of Rs 801 crore, a big 59.4% jump from last year. This is Yes Bank’s highest quarterly profit since its major restructuring.
What helped this sharp rise? Strong gains from non-interest income, better cost control, and stable asset quality.
Let’s break it down.
Higher earnings from non-interest income
While the bank’s net interest income (NII) grew 5.7% year-on-year to Rs 2,371.5 crore, the real star was non-interest income, which jumped 46.1% to Rs 1,752 crore. This was mainly due to treasury gains.
Core fees rose slightly by 3% to Rs 1,268 crore. Most of it (56.4%) came from the retail side. However, digital banking fees took a hit due to a one-time UPI fee change.
Stable margins and strong profit growth
Yes Bank’s net interest margin (NIM) improved to 2.5%, up 10 basis points from last year.
Operating profit jumped 53.4% to Rs 1,358 crore. At the same time, provisions increased 34.1% to Rs 284 crore.
A key improvement was the cost-to-income ratio, which dropped to 67.1%, compared to 74.3% a year ago.
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Asset quality stays solid
Yes Bank kept its asset quality stable. Gross NPA stood at 1.6%, and net NPA at just 0.3%.
Provision coverage ratio (PCR) also improved to 80.2%.
During the quarter, the bank recovered or upgraded loans worth Rs 1,170 crore, including Rs 338 crore from security receipts.
However, slippages rose to Rs 1,458 crore from Rs 1,223 crore in the previous quarter.
Business growth picks up
Total advances rose 5% year-on-year to Rs 2.41 lakh crore. Commercial and micro banking led this growth. Retail loans were flat, growing just 0.3%.
Deposits rose 4.1% to Rs 2.76 lakh crore, driven by a strong push in retail and branch banking. The CASA ratio improved to 32.8%, up 200 basis points. Retail-led deposits rose 20%.
Capital boost and investor confidence
The bank’s capital position is also stronger now. CET-1 ratio rose to 14%, while overall capital adequacy reached 16.2%.
In a big move, Sumitomo Mitsui Banking Corporation (SMBC) signed a deal to buy a 20% stake in Yes Bank from SBI and others. This boosted investor confidence.
Credit agencies like Moody’s, CARE, and ICRA also upgraded the bank’s long-term ratings.
CEO’s statement
CEO Prashant Kumar said, “The bank started the year on a strong note. Metrics like RoA (0.8%), PPoP (Rs 1,358 crore), and NIM (2.5%) showed clear progress.”
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