Yes Bank announced its financial results for the third quarter ending December 31, 2025, on Saturday. The private sector lender reported a net profit of Rs 952 crore, showcasing a significant improvement in its earnings performance.
Sharp Rise in Profitability
The bank's profit surged by 55.4% compared to the Rs 612 crore recorded in the same quarter last year. Sequentially, profit grew by 45.4% from Rs 654 crore in the September 2025 quarter.
Excluding a one-time impact of Rs 155 crore related to incremental gratuity provisions under new labour codes, the adjusted profit after tax reached Rs 1,068 crore. This translates to a robust normalised year-on-year growth of 74.4%.
Balance Sheet Expansion
Yes Bank's balance sheet continued its steady expansion. Total deposits increased by 5.5% year-on-year to Rs 2,92,524 crore. Net advances rose by 5.2% to Rs 2,57,451 crore.
On a sequential basis, advances grew by 2.9%. However, deposits declined by 1.3% over the previous quarter. This reduction stemmed from a strategic cut in non-core borrowings and high-cost deposits.
The credit-to-deposit ratio stood at 88%. This compares with 88.3% a year ago and 84.5% in the preceding quarter.
Income Growth and Cost Management
Net interest income increased by 10.9% year-on-year and 7.2% sequentially to Rs 2,466 crore. This growth was supported by a lower cost of funds and the rundown of deposits maintained against priority sector lending shortfalls.
Non-interest income rose by 8% to Rs 1,633 crore, accounting for approximately 40% of total net income. Core fee income grew by 9.8% to Rs 1,538 crore.
Treasury gains and miscellaneous income amounted to Rs 95 crore. The bank also recorded a gain of Rs 555 crore from the redemption of security receipts during the quarter.
Operating expenses increased by 7.8% year-on-year to Rs 2,865 crore. Excluding the one-off gratuity provision, underlying operating costs rose by a modest 2%, reflecting continued cost discipline.
Provisions and Asset Quality
Provisions declined sharply by 91.5% to Rs 22 crore. This was aided by a Rs 566 crore reversal in investment provisions following security receipt redemptions. This 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 showed further improvement. The 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, driven by growth in savings account balances.
Gross non-performing assets declined to 1.5%. Net NPAs remained stable at 0.3%. Fresh slippages fell to an eight-quarter low of 1.6%, or Rs 1,050 crore. This compares favorably with 2.2% in the same quarter last year.
