Bad loan recoveries help life Yes Bank Q3FY26 profits up 55% to Rs 952 crore

MUMBAI: Yes Bank on Saturday reported a net profit of Rs 952 crore for the third quarter ended Dec 31, 2025, marking a sharp improvement in earnings as gains from recovery of bad loans and higher core income.
Yes Bank said profit rose 55.4% from Rs 612 crore a year earlier and was up 45.4% sequentially from Rs 654 crore in the September quarter. Excluding a one-time impact of Rs 155 crore from incremental gratuity provisions under the new labour codes, profit after tax stood at Rs 1,068 crore, translating into a normalised year-on-year growth of 74.4%.
The balance sheet continued to expand at a steady pace. Total deposits rose 5.5% year-on-year to Rs 2,92,524 crore, while net advances increased 5.2% to Rs 2,57,451 crore. Sequentially, advances grew 2.9%, even as deposits declined 1.3% over the previous quarter due to a reduction in non-core borrowings and high-cost deposits. The credit-to-deposit ratio stood at 88%, compared with 88.3% a year ago and 84.5% in the preceding quarter.
Net interest income increased 10.9% year-on-year and 7.2% sequentially to Rs 2,466 crore, supported by a lower cost of funds and the rundown of deposits maintained against priority sector lending shortfalls. Non-interest income rose 8% to Rs 1,633 crore and accounted for about 40% of total net income.
Core fee income increased 9.8% to Rs 1,538 crore. Treasury gains and miscellaneous income stood at Rs 95 crore. During the quarter, the bank also recorded a gain of Rs 555 crore from the redemption of security receipts.
Operating expenses rose 7.8% year-on-year to Rs 2,865 crore. Excluding the one-off gratuity provision linked to labour code changes, underlying operating costs increased a modest 2%, reflecting continued cost discipline. Provisions declined sharply by 91.5% to Rs 22 crore, aided by a Rs 566 crore reversal in investment provisions following security receipt redemptions, which largely offset Rs 533 crore of provisions for non-performing advances. The bank described credit costs for the quarter as negligible.
Asset quality and efficiency indicators improved further. Net interest margin expanded to 2.6% from 2.4% a year earlier and 2.5% in the previous quarter. The CASA ratio improved to 34% from 33.1% a year ago, led by growth in savings account balances. Gross non-performing assets declined to 1.5%, while net NPAs remained stable at 0.3%. Fresh slippages fell to an eight-quarter low of 1.6%, or Rs 1,050 crore, compared with 2.2% in the same quarter last year.