Yes Bank’s fiscal third-quarter net profit surged 55% to Rs 952 crore, helped by a sharp fall in provisions for bad loans and other contingencies.

The Mumbai-based bank, in which Japan's Sumitomo Mitsui Banking Corporation bought a 24.22% stake last year, reduced overall provisions to Rs 21.89 crore compared to Rs 259 crore in the year-ago period.

NII and NIM

Yes Bank's net interest income (NII) grew 10.9% to 2,466 crore. While domestic loans grew 5.2%, deposits rose 5.5%.

Net interest margin (NIM) rose to 2.6% from 2.5% in the previous quarter amid drop in deposit costs in the wake of the Reserve Bank of India (RBI) reducing key interest rates by 125 basis points since February 2025.

Asset quality

The lender's gross non-performing asset (NPA) ratio improved to 1.5% at the end of December, compared with 1.6% in the preceding quarter.

Net NPA ratio dropped by 20 bps YoY but remained flat quarter-on-quarter at 0.3%.

Gross slippages reduced to Rs 1,050 crore from Rs 1,248 crore in the quarter-ago period.

Loan growth below double-digit

The lender’s advances stood at Rs 2.57 lakh crore, up 5.2% year-on-year and 2.9% quarter-on-quarter.

Yes Bank managing director and CEO Prashant Kumar said credit growth is lower than the banking system’s double-digit performance as the lender is "cautious" on new loans. 

There is a pricing battle on the corporate loans front while the home and auto loans are not profitable given the high cost of funding for the bank, Kumar said.

Yes Bank is targeting a loan growth of 8% for FY26, he added.

Deposits

The bank’s deposits rose 5.5% YoY but declined 1.3% QoQ to Rs 2.93 lakh crore.

CASA (current account savings account) ratio improved to 34% in the December quarter compared to 33.1% a year ago and 33.7% sequentially.

On SMBC’s plan

On the bank's growth strategy following the investment from SMBC, Kumar said the lender will release a strategic roadmap over the quarter.

The bank has also initiated the process of succession planning for his role, he said.

Kumar’s tenure as CEO, which began in 2020, will end in April.