Yes Bank has started FY26 on a strong note, reporting its highest quarterly profit since its reconstruction. In the April–June 2025 quarter (Q1FY26), the bank posted a standalone net profit of ₹801 crore — a 59% jump year-on-year, up from ₹502 crore in Q1FY25.
This marks a significant turnaround for the private lender, driven by a mix of improved margins, strong non-interest income, and better asset quality.
Yes Bank Strong Financial Performance in Q1FY26
Yes Bank’s net interest income (NII) rose 5.7% YoY to ₹2,371 crore, despite a 1.6% dip in interest income to ₹7,596 crore. The improvement came from lower funding costs and better portfolio mix. Net interest margin (NIM) stood at 2.5%, helped by a higher share of low-cost CASA deposits and lending under priority sector norms.
Non-interest income grew sharply by 46% YoY to ₹1,752 crore, primarily driven by treasury gains. Operating profit increased 53% YoY to ₹1,358 crore. Meanwhile, operating expenses rose moderately by 8%, improving the bank’s cost-to-income ratio and highlighting better operational efficiency.
Healthy Loan Growth & Asset Quality
On the balance sheet front, Yes Bank’s advances rose 5% YoY to ₹2.41 lakh crore, led by a 19% growth in commercial banking and an 11.2% increase in micro-enterprise lending. Deposits grew by 4.1% YoY to ₹2.76 lakh crore. The CASA ratio improved to 32.8%, up from 30.8% in the same quarter last year — a sign of strengthening retail franchise.
Asset quality remained steady. Gross non-performing assets (GNPA) stayed at 1.6%, while net NPAs stood at just 0.3%. Provision coverage remained strong at 80.2%. Gross slippages during the quarter were ₹1,458 crore, while recoveries and upgrades amounted to ₹1,170 crore, showcasing good control over credit quality.
SMFG Becomes Largest Shareholder
A major development is the expected capital infusion from Sumitomo Mitsui Financial Group (SMFG). The Japanese giant has signed a binding agreement to acquire a 20% stake in Yes Bank, mainly from State Bank of India (SBI) and other PSU banks. This would make SMFG the bank’s largest shareholder, surpassing SBI’s current 24% stake.
The bank’s Board approved the Q1 results on July 19, with a scheduled analyst call later the same day. Market watchers are viewing SMFG’s entry as a big vote of confidence in Yes Bank’s long-term prospects.
Yes Bank Stock Performance and Market Sentiment
Following reports of SMFG’s $1.1 billion investment, Yes Bank shares rallied 3.3% to ₹20.65 on July 15. Over the past year, however, the stock has remained volatile, falling nearly 22%. From a peak of ₹27.20, it had dropped to ₹16 in March 2025 but has since recovered about 25% from that low.
Post the Q1 earnings announcement, the share price remained flat, closing around ₹20.17–₹20.20. Analysts believe consistent earnings and clarity on strategic direction will be key to driving the next leg of stock movement.
Conclusion
Yes Bank’s Q1FY26 results mark a major milestone in its post-revival journey. The 59% rise in profit, margin improvement, and strong non-interest income show a return to stability and growth. The upcoming investment by SMFG adds another layer of credibility and could potentially transform the bank’s growth trajectory. Still, cautious optimism remains, as future performance and investor sentiment will determine whether the stock can climb back to its earlier highs.
F.A.Q.
– What was Yes Bank’s net profit in Q1FY26?
Yes Bank reported a standalone net profit of ₹801 crore in Q1FY26 (April–June 2025), marking a 59% year-on-year increase compared to ₹502 crore in Q1FY25. This is the bank’s highest profit since its reconstruction.
– How did Yes Bank perform in terms of interest income and margins?
Interest income declined slightly by 1.6% to ₹7,596 crore. However, net interest income (NII) grew 5.7% YoY to ₹2,371 crore, supported by lower funding costs. The net interest margin (NIM) improved to 2.5%, reflecting better asset-liability management.
– What is the current status of Yes Bank’s asset quality?
Yes Bank’s gross NPA remains stable at 1.6%, and net NPA is at 0.3%. The provision coverage ratio is strong at 80.2%. Gross slippages were ₹1,458 crore during the quarter, offset by recoveries and upgrades of ₹1,170 crore.
– What is the significance of SMFG’s stake in Yes Bank?
Sumitomo Mitsui Financial Group (SMFG) is set to acquire a 20% stake in Yes Bank from SBI and other PSU banks. This move will make SMFG the largest shareholder, overtaking SBI’s 24% holding. It’s seen as a major confidence booster for the bank and its investors.
– How did the stock market react to the Q1 results and SMFG deal?
Yes Bank shares rose 3.3% to ₹20.65 on July 15 after reports of the SMFG investment. After the Q1FY26 results were announced, the stock closed flat around ₹20.17–₹20.20. Analysts believe that sustained financial performance will be key to further gains.
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