YES Bank reported a sharp rise in profitability in the December quarter, aided by lower funding costs, steady balance sheet expansion and a marked improvement in asset quality.
The private lender posted a net profit of ₹952 crore in Q3FY26, up 55.4% year-on-year and 45.4% quarter-on-quarter. Adjusted for the one-time gratuity impact, profit stood at ₹1,068 crore, registering a stronger 74.4% annual growth. Return on assets improved to 0.9% from 0.6% a year ago, while adjusted RoA stood at 1.0%, signalling improved operational efficiency.
Net interest margins rose to 2.6% during the quarter, compared with 2.4% in Q3FY25 and 2.5% in the previous quarter. This was supported by a decline in the cost of deposits, which fell to 5.6%, down 50 basis points year-on-year and 10 basis points sequentially. Non-interest income came in at ₹1,633 crore, an increase of 8% from a year earlier.
Operating profit, adjusted for the gratuity impact, rose 28.7% year-on-year to ₹1,389 crore. The cost-to-income ratio improved to 66.1%, from 71.1% a year ago, reflecting tighter cost control and operating leverage.
The bank’s balance sheet continued to expand sequentially, with momentum in low-cost deposits. Retail and branch-led deposits grew 9% year-on-year to ₹1.73 trillion, while CASA deposits increased 8.5% to ₹99,483 crore. On an average quarterly balance basis, CASA growth stood at 13.6%. Net advances rose 5.2% year-on-year to ₹2.57 trillion, with retail disbursements growing around 15%.
Asset quality showed significant improvement, with slippages declining to 1.6% of advances. The gross NPA ratio eased to 1.5%, while net NPAs remained stable at 0.3%. Provision coverage strengthened to 83.3%, and net credit costs were negligible for the quarter.
During the period, YES Bank was included in the Nifty Bank index and also recorded its highest-ever S&P Global ESG score of 79, underscoring progress in governance and sustainability practices.
