YES Bank Q3 profit jumps 55% YoY to ₹952 crore on higher margins; interest income rises 11%

YES Bank on Saturday reported a strong performance for the third quarter ended December 2025 (Q3FY26), with net profit rising 55.4% year-on-year (YoY) to ₹952 crore, aided by a lower cost of funds, improvement in margins and a sharp gain from security receipts. On a sequential basis, profit surged 45.4% from ₹654 crore in the September quarter.

The net interest income of the bank climbed 10.9% YoY and 7.2% sequentially to ₹2,466 crore, as compared to ₹2,224 crore in Q3FY25 and ₹2,301 crore in Q2FY26. The non-interest income rose 8% YoY to ₹1,633 crore, while total income grew 9.7% YoY to ₹4,098 crore, YES Bank said in its earnings report.

The net interest margin (NIM) improved to 2.6% in Q3FY26, up from 2.5% in Q2FY26 and 2.4% a year ago, supported by a 60-basis-point YoY reduction in cost of funds. This was driven by a 50-bps decline in the cost of deposits and lower borrowing costs.

Operating costs increased 7.8% YoY to ₹2,865 crore, largely due to a one-time ₹155-crore gratuity provision following changes in wage definitions under the new labour codes. Excluding this impact, operating expenses rose only 2% YoY and 2.3% quarter-on-quarter. The cost-to-income ratio, adjusted for the one-time provision, improved to 66.1%, compared with 71.1% a year ago and 67.1% in the previous quarter, the release noted.

Operating profit stood at ₹1,234 crore, up 14.3% YoY. Adjusted for the gratuity impact, operating profit rose 28.7% YoY, reflecting improved operating efficiency. Return on assets (RoA) improved to 0.9% from 0.6% in both Q3FY25 and Q2FY26. Provisioning remained muted, with non-tax provision costs at just ₹22 crore, while the bank also reported a ₹555-crore profit from security receipts. Tax provisions included ₹45 crore related to refunds for prior periods.

Asset quality improved further during the quarter, with the slippage ratio declining to its lowest level in eight quarters. Gross slippages fell to ₹1,050 crore, or 1.6% of advances, from ₹1,248 crore (2.0%) in Q2FY26 and ₹1,348 crore (2.2%) in Q3FY25. The gross NPA ratio improved to 1.5% from 1.6% a year ago, while the net NPA ratio declined to 0.3% from 0.5% in Q3FY25. Retail asset quality also strengthened, with retail slippages declining to 3.7% of retail advances—the lowest level in seven quarters. Total recoveries and upgrades during the quarter stood at ₹1,224 crore.

On the business front, advances rose to ₹2,57,451 crore, up 2.9% quarter-on-quarter and 5.2% YoY, while total disbursements increased 7% YoY to ₹26,982 crore, led by a 15% jump in retail disbursements. Deposits grew 5.5% YoY to ₹2,92,524 crore, with the share of granular deposits improving to 66.2%.

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.

YES Bank added 33 branches during Q3FY26, taking total additions to 76 branches in the first nine months of FY26, close to its full-year target of 80 branches. The bank was also included in the NIFTY Bank Index, effective December 31, 2025.

In its earnings filing, the bank said it had no outstanding secured listed non-convertible debt securities as of December 31, 2025, and confirmed that proceeds from earlier NCD issuances had been fully utilised in line with stated objectives.

Ahead of the earnings announcement, YES Bank shares closed Friday’s session at ₹23.46, up 2.2%, valuing the lender at ₹73,615 crore. The stock is trading close to its 52-week high of ₹24.30 touched in October 2025 and has rebounded more than 50% from its 52-week low of ₹16.02 hit in March 2025.