Kamal Ghorui
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, supported by lower credit costs and improved operating 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 Tonse outlined a strategy focused on profitability, asset quality and disciplined expansion as the bank leverages its improving balance sheet and strategic investment by Japan’s SMBC.Tonse said his initial assessment points to a “strong alignment of purpose across stakeholders” and a bank that has stabilised after a prolonged restructuring phase. “We will build on what is working well, strengthen areas that require more attention and pursue growth that is thoughtful, calibrated and sustainable,” he said, adding that execution discipline and stakeholder trust would remain central.The 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 lakh, while other income declined 0.5% to Rs 173,017 lakh. Total income rose 0.3% to Rs 938,107 lakh.Interest expended declined 6.1% to Rs 501,320 lakh, leading to a 15.9% rise in net interest income to Rs 2,638 crore. Net interest margin improved to 2.7% in the quarter, up 20 basis points year-on-year and 10 basis points sequentially.Management said margin expansion remains a key lever, with the bank targeting a medium-term NIM range of 3.25–3.5% over the next two to three years. This would be driven by lower cost of deposits, reduction in high-cost borrowings and the unwinding of regulatory constraints.Operating expenses rose 1.8% to Rs 274,963 lakh, while total expenditure declined 3.5% due to lower funding costs. Operating profit increased 23.1% to Rs 161,824 lakh. Provisions fell 41% to Rs 18,755 lakh, resulting in a 43.6% rise in profit before tax to Rs 143,069 lakh.Asset quality improved, with gross NPAs declining to 1.3% and net NPAs to 0.2%, the best levels in 24 quarters. Provision coverage ratio stood at 81.9%. Management attributed this to disciplined underwriting, improved collections and lower slippages across segments.Recoveries and upgrades during FY26 stood at Rs 4,795 crore, including Rs 1,547 crore on security receipts. The bank said it remains on track to deliver Rs 800–1,000 crore of such recoveries in FY27.Advances grew 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 the CASA ratio improved to 35.1%. Retail disbursements grew 41% year-on-year, indicating a shift towards granular lending.Management said growth has become broad-based across retail and wholesale segments and the bank aims to at least match industry growth rates after a period of deliberate underperformance. “With SMBC coming in, the opportunity set significantly widens… we now have the ability to grow, build scale and yet be profitable,” a senior executive said.Retail banking, which has reported losses at the segmental level, is now internally profitable after adjusting for accounting classifications and one-off costs, management said. The business turned profitable in the March quarter after breaking even in December, aided 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.
