MUMBAI: YES Bank reported a net profit of Rs 1,068 crore for the March 2026 quarter, up 44.8% from Rs 738 crore a year earlier, helped by lower credit costs and improved operational performance.
For the full year, net profit rose 44.5% to Rs 3,476 crore, while return on assets improved to 0.8% from 0.6% in the previous year.In his maiden earnings call, the bank’s new Managing Director and CEO Vinay Tonsi outlined a strategy focused on profitability, asset quality and disciplined expansion as the bank benefits from its improved balance sheet and strategic investment by Japan’s SMBC.Tounsi said his initial assessment indicated a “strong alignment of goals between stakeholders” and a bank that had stabilized after a long restructuring phase.
“We will build on what is working well, strengthen areas that require more attention and seek measured, calibrated and sustainable growth,” he said, adding that discipline in implementation and stakeholder trust will remain pivotal.March quarter numbers showed that earnings growth was driven by margin improvement and lower provisions rather than revenue expansion. Interest earned rose 0.5% year-on-year to Rs 765,090 thousand, while other income fell 0.5% to Rs 173,017 thousand.
Total income increased by 0.3% to Rs 938,107 thousand.Interest expense fell by 6.1% to Rs 501,320 lakh, resulting in net interest income rising 15.9% to Rs 2,638 lakh. Net interest margin improved to 2.7% in the quarter, up 20 basis points year over year and 10 basis points sequentially.Management said margin expansion remains a key factor, with the bank targeting an average net interest margin range of 3.25-3.5% over the next two to three years.
This will be driven by lower cost of deposits, lower high-cost loans, and easing regulatory restrictions.Operating expenses increased by 1.8% to Rs 274,963 thousand, while total expenses decreased by 3.5% due to lower financing costs. Operating profit increased by 23.1% to Rs 161,824 thousand. Provisions decreased by 41% to Rs 18,755 lakh, resulting in pre-tax profit increasing by 43.6% to Rs 143,069 lakh.Asset quality improved, with gross non-performing assets falling to 1.3% and net non-performing assets falling to 0.2%, the best levels in 24 quarters.
The allocation coverage ratio reached 81.9%. Management attributed this to disciplined underwriting, improved collection, and reduced slippage across sectors.Refunds and promotions during FY26 stood at Rs 4,795 crore, including Rs 1,547 crore on warranty receipts. The bank said it remains on track to deliver Rs 800-1,000 crore of these recoveries in FY27.Advances rose 11.1% year-on-year to Rs 2.73 lakh crore, while deposits rose 12.1% to Rs 3.19 lakh crore.
CASA deposits crossed Rs 1 lakh crore and CASA ratio improved to 35.1%. Retail disbursements rose 41% year-on-year, indicating a shift towards fractional lending.Management said growth has become broad-based across the retail and wholesale segments, and the bank aims to at least match industry growth rates after a period of deliberate underperformance. “With the coming of SMBC, the opportunity expands dramatically…We now have the ability to grow and build scale while achieving profitability,” said a senior executive.Retail banking, which reported losses at the segment level, is now internally profitable after adjusting accounting classifications and one-time costs, the management said. The business turned profitable in the March quarter after breaking even in December, supported by lower credit costs and improved product mix.The bank also said its wealth management business has assets under management of around Rs 30,000 crore and is expected to grow through synergies with corporate and branch networks.