In a result that stunned the markets and reignited optimism in one of India’s most-watched banking turnarounds, Yes Bank has reported a standout first quarter for FY2025–26, posting a staggering 59% year-on-year (YoY) rise in net profit to ₹801 crore. With improvements seen across almost every key operational and financial metric—ranging from net interest income to asset quality—the bank delivered what industry insiders are calling its strongest quarter in over five years.
Once beleaguered by regulatory interventions, falling profits, and confidence issues, Yes Bank’s recent results offer a clear picture: the bank is not only stabilizing, but it is also on a trajectory for sustained growth. Here are seven key insights into what the numbers reveal.
1. Net Profit Soars 59%—A Turnaround Taking Shape
Yes Bank reported a net profit of ₹801 crore for Q1 FY26, compared to ₹502 crore in the same quarter a year ago. This translates into a strong 59% year-on-year rise, outperforming analyst expectations and reinforcing the bank’s long-standing transformation narrative. The bank’s sequential profit also rose by 8%, confirming strong operational momentum heading into the second quarter.
This performance was primarily supported by a 5.7% increase in Net Interest Income (NII), which rose to ₹2,371 crore, and a massive 44% jump in non-interest income, which reached ₹1,824 crore during Q1. These figures reflect both strong retail traction and benefits from improved treasury operations, fee collections, and other services-related income.
2. Steady Growth in Advances and Deposits
The bank’s advances portfolio grew to ₹2,41,024 crore, expanding by 5% from the previous year. This growth is crucial as it signals rising credit demand and reaffirms that Yes Bank is winning customer trust in both the retail and MSME (Micro, Small & Medium Enterprises) segments. Over 74% of the bank’s total advances now stem from the Retail and Commercial Banking segments.
On the other side of the balance sheet, the bank’s deposits rose by 4.1%, reaching ₹2,75,843 crore. Notably, the CASA ratio (Current Account Savings Account ratio) improved from 30.8% to 32.8% YoY—strengthening its base of low-cost deposits. This indicates Yes Bank’s successful push for stable, customer-friendly deposits that boost lending margins and cut cost of funds.
Additionally, the bank acquired over 2.5 lakh new CASA accounts in the quarter, highlighting increased traction at the grassroots retail level.
3. Asset Quality Remains Well-Controlled
One of the most critical areas for any turnaround strategy is asset quality, and here Yes Bank has shown encouraging consistency. The Gross NPA ratio eased to 1.6% from 1.7% in Q1 FY25, while the Net NPA stood flat at 0.3%, affirming well-controlled credit risk.
In absolute terms, Gross NPAs stood at ₹4,022 crore, showing a controlled and manageable bad loan book. The bank’s provisions declined by 11% sequentially, falling to ₹284 crore, in line with fewer incremental stress assets coming into the system.
This marks the sixth consecutive quarter that Yes Bank has navigated stress recognition without major turbulence, enhancing investor trust in its risk governance structure.
4. NIM, RoA, and Operational Metrics Stay Robust
In Q1 FY26, Yes Bank maintained its Net Interest Margin (NIM) at 2.5%, an essential marker of balance between credit profitability and deposit costs. Other key indicators like Return on Assets (RoA) stood at 0.8% and Pre-Provision Operating Profit (PPOP) rose to ₹1,358 crore, underlining that revenue streams are balancing operational costs effectively.
The bank’s cost-to-income ratio, an important measure of operational productivity, is also showing signs of becoming more manageable. Analysts note that Yes Bank’s consistent NIM and strong fee income could buffer any pressure from deposit repricing or rising interest rates in the coming quarters.
5. Strategic Infusion: Overseas Partner Adds Credibility
A significant development during the quarter was the entry of Sumitomo Mitsui Banking Corporation (SMBC), Japan’s second-largest bank, as a strategic partner. In a move expected to significantly strengthen balance sheet flexibility, SMBC has agreed to acquire up to 20% stake via secondary purchase and potential follow-on investments.
This strategic alliance was created via agreements to purchase part of State Bank of India’s and other banks’ holdings in Yes Bank. Importantly, SBI remains a key promoter and influential shareholder in Yes Bank. But the SMBC arrangement is expected to provide global risk management practices, technical banking innovations, and possibly access to cross-border capital.
Additionally, Yes Bank received credit upgrades from multiple agencies, reinforcing its improving fundamentals. This development boosts refinancing ability, lowers risk perception in capital markets, and enhances long-term institutional investor appetite.
6. Strong Market Reaction, Re-Rating Possibilities
Investors responded positively to the bank’s results. Yes Bank stock was already on an upward trend in the last month, and the Q1 performance fueled expectations of a re-rating, with some brokerages revising their target prices upward.
The stock has fluctuated between ₹16 and ₹27 in the last 52 weeks, and with sustained financial visibility, many traders believe the stock could become a meaningful part of long-term banking portfolios—especially if the upward earnings momentum continues across FY26.
Retail investors, too, have shown consistent interest in the bank’s story—partially due to the brand recognition and lingering value of the Yes Bank retail franchise, especially in Tier 2 and Tier 3 cities.
7. CEO Commentary and Forward Guidance
Prashant Kumar, Managing Director and CEO of Yes Bank, released a detailed statement alongside the earnings, in which he said:
“We have delivered another strong quarter with robust growth in profits. Strategic initiatives across retail and MSME, a disciplined risk framework, and digital investments continue driving sustainable performance. Our asset quality remains stable while customer acquisition and deposit growth trends are moving in the right direction.”
The bank’s management also highlighted its four key priorities for FY26:
-
Maintain single-digit GNPA while improving collections.
-
Enhance CASA ratio to over 35%.
-
Improve operating efficiency by investing in AI-driven banking and credit scoring.
-
Broaden fee-based income through wealth, cards, and partnerships.
Internal teams are currently reviewing further digitization of the lending and onboarding ecosystem, and new AI-enhanced analytics capabilities are being deployed for SME loan underwriting.
The Broader Picture: The Revival of India’s Mid-Tier Private Banks
Yes Bank’s massive quarterly surge is not only its own moment of validation—it stands as evidence of a broader churn and revival within India’s mid-tier private banking sector. As RBI encourages robust credit growth while tightening governance norms for stressed accounts, lenders like Yes Bank are showing that disciplined execution can reverse past setbacks.
Banks with an urban-rural focused retail model and MSME banking pipeline are well-positioned to gain market share over the next five years. In this context, Yes Bank may be emerging as a dark horse—a lender that scaled back from the edge of collapse, rebuilt investor confidence, attracted a foreign strategic partner, and is now pushing ahead on sound financial footing.
Conclusion: A Defining Quarter for a Bank Redefining Itself
With profit growth clocking in at 59%, rising deposit traction, improving credit quality, and strategic capital affirmed, Yes Bank’s first quarter of FY26 serves as a powerful signal that the lender isn’t just reacting to past setbacks—it is shaping a future worth watching. The final chapters of its transformation journey are yet to be written, but this quarter marks a strong beginning to what could be one of India’s most remarkable banking comebacks.
With eyes on how global partnerships and digital-native strategies will play out over the next few quarters, Yes Bank has thrown down a clear marker—it is rebuilding, rigorously. And this time, numbers—not narratives—are leading the story.
Another notable highlight from the quarter is Yes Bank’s accelerated focus on technology-driven transformation. Over the past 12 months, the bank has invested significantly in AI-enabled credit assessment, automated onboarding journeys for customers, and real-time fraud detection systems. These investments are not only helping the bank scale efficiently but also enabling better customer experiences. The launch of new digital dashboards and improved mobile banking UI have reportedly increased user engagement by over 18% quarter-on-quarter. Fintech integrations across lending, insurance, and wealth advisory platforms are helping Yes Bank evolve from a traditional bank into a next-gen digital-first banking ecosystem.
The bank also showed encouraging momentum in its rural and semi-urban segments. In line with its Bharat Banking initiative, Yes Bank has expanded its branch count in Tier 3 and Tier 4 towns, deepening its footprint where credit access has remained limited. These expansion efforts, combined with digital reach, registered a 32% increase in micro-enterprise account openings and 21% growth in agri-loan disbursements over the year. Management believes this hybrid model of physical presence and tech enablement can uniquely position Yes Bank to penetrate underbanked regions while capturing long-term deposits and growing low-risk credit portfolios sustainably.
Employee productivity and internal morale also saw positive shifts this quarter. With attrition levels normalizing and top-level hiring being stabilized, the bank reported a 15% increase in per-employee revenue contribution. Internal surveys conducted during the quarter also showed improved employee satisfaction scores, attributed to streamlined performance metrics, learning and development programs, and career path clarity. This soft but critical aspect of the bank’s turnaround reflects a stronger focus on people, culture, and alignment of long-term organizational goals—an area once considered a major weak link during its troubled years.
Finally, Yes Bank’s Q1 memo reflects growing international ambitions. In partnership with SMBC, there are whispers of a pilot program in trade finance and cross-border remittance corridors targeting Indian SME exporters. With RBI gradually relaxing foreign banking participation norms and global interest in India’s digital infrastructure rising, Yes Bank may find itself in a strategic sweet spot. Whether through partnerships, co-lending models, or sovereign debt injections into fintech-aligned branches, analysts suggest that the bank is finally ready to act on a regional and perhaps even global scale—so long as it maintains the current data-driven discipline and governance transparency.
Follow: Yes Bank
Also Read: Shocking Twists as Kannada Star Ranya Rao Gets 1-Year Jail in ₹12.5 Crore Gold Smuggling Scandal
