YES Bank Q3 FY26 results show profit surge and asset quality improvement

YES Bank has reported a sharp improvement in its Q3FY26 financial results for the quarter and nine months ended 31 December 2025. Profitability rose strongly, supported by better margins, lower credit costs and stronger asset quality. The bank also showed healthy growth in deposits and advances, backed by a rising CASA ratio and stable capital and liquidity buffers.

Net profit for the quarter stood at Rs 952 crore, reflecting a 55.4% rise year-on-year and 45.4% growth sequentially. Return on Equity improved to 7.7%, while Return on Assets moved up to 0.9%. Credit costs for the quarter were effectively nil, with provisions falling to Rs 22 crore, signalling better asset quality trends and controlled slippages.

Net Interest Income came in at Rs 2,466 crore, an increase of 10.9% year-on-year, helped by lower funding costs and improved balance sheet mix. Net Interest Margin rose to 2.6%, supported by a fall in deposit costs and a focus on higher-yield lending segments. Non-interest income remained solid at Rs 1,633 crore, up 8% year-on-year, driven by core fees, credit cards and third-party distribution.

Operating efficiency improved as operating expenses, when adjusted for the gratuity impact, increased by only 2% year-on-year. This restraint in costs helped bring the cost-to-income ratio down to 66.1%, compared with 71.1% a year earlier. These gains at the operating level, together with near-zero credit costs, underpinned stronger profitability within the Q3FY26 financial results.

Asset quality indicators strengthened further during Q3FY26. The Gross NPA ratio improved to 1.5%, lower by 10 basis points both year-on-year and sequentially. Net NPA stayed steady at 0.3%, reflecting contained stress across portfolios. The Provision Coverage Ratio increased to 83.3%, versus 71.2% in Q3FY25, enhancing balance sheet resilience against potential future losses.

Slippages fell to 1.6% of advances, the lowest level seen in the past eight quarters. Both secured and unsecured books showed better behaviour, while retail slippages improved to 3.7%, the best outcome in seven quarters. Recoveries and upgrades reached Rs 1,224 crore during the quarter, including Rs 555 crore from security receipts, which helped keep net credit costs minimal within the Q3FY26 financial results.

Deposits rose to Rs 2.93 lakh crore, an increase of 5.5% year-on-year, with low-cost deposits performing better than the overall base. CASA deposits reached Rs 99,483 crore, up 8.5% year-on-year, taking the CASA ratio to 34%. Savings account balances grew 12.7% year-on-year, contributing to a reduction in total funding costs and supporting improved margins in the Q3FY26 financial results.

The bank’s liquidity and capital levels remained comfortable. The average Liquidity Coverage Ratio stood at 123.8%, well above regulatory requirements. The CET-1 ratio was 13.9%, and the overall CRAR was 15.5%. These levels provide adequate room for balance sheet growth while meeting regulatory norms and support YES Bank’s stated growth plans for the coming quarters.

On the lending side, YES Bank’s net advances rose to Rs 2.57 lakh crore, recording 5.2% growth year-on-year and 2.9% quarter-on-quarter. Commercial banking, corporate banking and credit cards remained the main engines for this expansion. Retail asset disbursements increased by about 15% year-on-year, indicating stronger demand in higher-yield categories and supporting margin expansion within the Q3FY26 financial results.

YES Bank continued to expand its physical network and franchise reach during Q3FY26. The bank added 33 new branches in the quarter, taking total additions for the nine months to 76 branches. By the end of Q3FY26, YES Bank had already achieved 95% of its full-year growth target for branch expansion, reflecting a sustained focus on widening customer access and geographic presence.

Market positioning also improved as YES Bank’s shares were added to the NIFTY Bank Index with effect from 31 December 2025. This inclusion is seen as a key milestone that points to better investor confidence and stronger market visibility. The move followed steady progress in profitability, asset quality and CASA ratios highlighted in the Q3FY26 financial results.

Key operating and balance sheet metrics from YES Bank’s Q3FY26 financial results are summarised below.

Metric	Q3FY26 / Latest	Change / Reference
Net Profit	Rs 952 crore	+55.4% YoY, +45.4% QoQ
Net Interest Income (NII)	Rs 2,466 crore	+10.9% YoY
Net Interest Margin (NIM)	2.6%	Improved due to lower funding costs
Non-Interest Income	Rs 1,633 crore	+8% YoY
Cost-to-Income Ratio	66.1%	Down from 71.1% in Q3FY25
Gross NPA Ratio	1.5%	Down 10 bps YoY and QoQ
Net NPA Ratio	0.3%	Stable at low level
Provision Coverage Ratio	83.3%	Up from 71.2% in Q3FY25
CASA Ratio	34%	CASA deposits at Rs 99,483 crore
Total Deposits	Rs 2.93 lakh crore	+5.5% YoY
Net Advances	Rs 2.57 lakh crore	+5.2% YoY, +2.9% QoQ
CET-1 Ratio	13.9%	Capital adequacy remains strong
CRAR	15.5%	Above regulatory requirement
Average LCR	123.8%	Comfortable liquidity buffer

Mr. Prashant Kumar, Managing Director & CEO, YES BANK said, "Q3FY26 marks a breakthrough quarter for the Bank powered by a confluence of factors such as acceleration in profitability, sharp improvement in Asset Quality, gathering momentum in business volumes (disbursements) and continued industry-leading performance in CASA.""The Bank's Quarterly RoA (excluding the gratuity impact) has touched the critical milestone of 1.0% for the first time since reconstruction. At the operating level, this has been driven by expansion in NIMs, buoyancy in Fee income and a tight control over operating costs. In addition to this, the net credit costs for the quarter were negligible, supported by an eight-quarter low slippage at 1.6% of advances and continued redemptions from the Security Receipts portfolio," he added."Strengthening CASA ratio despite a challenging industry backdrop is aiding sharper improvement in Cost of Deposits vis-À-vis peers. Moreover, with disbursement momentum gathering pace, particularly in Retail, we expect to see acceleration in growth over the coming quarters. Aided by these tailwinds, we remain firmly on course to deliver on our strategic objectives and build a resilient, high-quality franchise that creates long-term value for the stakeholders," Prashant Kumar further stated.

Across profitability, asset quality, CASA growth and capital strength, YES Bank’s Q3FY26 financial results point to a bank in a more stable phase. Higher core income, restrained costs and better recoveries are supporting improved returns. The combination of granular deposits, growing retail disbursements and inclusion in the NIFTY Bank Index underlines progress against the bank’s stated strategic goals.