Yes Bank Ltd delivered a strong performance in the third quarter of FY26, reporting a sharp improvement in profitability alongside healthier asset quality indicators. For the quarter ended December 31, 2025, the private lender posted a net profit of ₹952 crore, marking a robust 55.4% year-on-year growth. The results reflect steady progress in the bank’s operational recovery and balance sheet strengthening.
Profitability Gains Driven by Higher Interest Income
The bank’s Net Interest Income (NII) rose 10.9% year-on-year to ₹2,466 crore during the quarter. This growth was supported by better lending momentum and an improvement in margins. Net Interest Margin (NIM) stood at 2.6%, up 20 basis points compared to the same period last year, indicating more efficient deployment of funds and improved yield on advances.
The expansion in margins came despite a competitive lending environment, underscoring the bank’s focus on disciplined pricing and portfolio mix optimization.
Asset Quality Shows Continued Improvement
One of the key highlights of Yes Bank’s Q3 performance was the continued strengthening of asset quality. The Gross Non-Performing Asset (GNPA) ratio declined to 1.5% in Q3FY26, improving by 10 basis points on a year-on-year basis. Similarly, the Net Non-Performing Asset (NNPA) ratio fell to 0.3%, down 20 basis points year-on-year.
This marked an improvement over the previous quarter, which had seen gross slippages of ₹1,248 crore or 2% of advances. The sequential decline indicates tighter credit monitoring and better recovery efforts.
Retail Portfolio Performance Strengthens
The retail loan book showed notable improvement, with retail slippages dropping to 3.7% of retail advances. This was the lowest level recorded in the past seven quarters, reflecting stabilization across both secured and unsecured segments.
The bank stated that asset quality trends improved consistently across key retail portfolios, supported by prudent underwriting standards and focused collection efforts. This improvement played a crucial role in reducing overall stress in the loan book.
Recoveries and Upgrades Support Balance Sheet
During the quarter, total recoveries and upgrades amounted to ₹1,224 crore. This figure includes a gross profit and loss gain of ₹555 crore from security receipts. These recoveries contributed to lower provisioning pressure and helped strengthen the bank’s overall asset quality metrics.
The steady pace of recoveries reflects the lender’s ongoing efforts to clean up legacy stress while maintaining balance sheet resilience.
Advances and Disbursements See Healthy Growth
The expansion was driven by sustained momentum in Commercial Banking, Large Corporate lending, and the Credit Cards segment.
Retail asset disbursements rose 15% year-on-year, highlighting improving demand and deeper penetration across customer segments. Overall, total disbursements for the quarter came in at ₹26,982 crore, up 7% year-on-year. The bank attributed this growth to consistent traction across its lending businesses.
Deposit Growth Stays Consistent
Yes Bank’s total deposits grew by 5.5% compared to the previous year, reaching ₹2,92,524 crore.
The bank maintained a strong performance in the CASA segment, which contributed to a stable funding structure and allowed for efficient cost of funds management.
The combination of low-cost CASA deposits and term deposits helped maintain the bank’s liquidity position throughout the quarter.
Outlook Remains Focused on Stability and Growth
The Q3FY26 results underline Yes Bank’s gradual but steady progress toward sustainable growth. Improved asset quality, expanding margins, controlled slippages, and consistent loan growth indicate that the lender’s strategic focus on balance sheet strength and core banking fundamentals is yielding results.
As the bank continues to build on these gains, maintaining asset quality discipline and deposit momentum will remain key to sustaining profitability in the coming quarters.
