MUMBAI: Mid-sized private sector lender Yes Bank has reported a solid set of numbers for the December quarter with standalone net profit zooming 55.4% on-year to Rs 952 crore, driven by higher margins and sharply lower credit cost, while asset quality improved.
The management led by chief executive Prashant Kumar said on a sequential basis too, the bank reported a massive 45.4% jump in net income, with over Rs 654 crore booked in the September quarter. Excluding the one-time impact of higher gratuity provisions of Rs 106 crore, following changes under the new labour codes from November 2025, profit after tax stood at Rs 1,068 crore, up 74.4% on year.
Kumar said most of its staff are not covered under the industry lobby IBA’s wage pacts and are from the period when the bank was cooperative, with the labour code driven provisions applying.
Excluding the gratuity impact, operating profit rose 28.7% to Rs 1,389 crore, reflecting tight cost control despite a rise in reported operating expenses. The cost-to-income ratio, adjusted for the gratuity impact, improved to 66.1 percent from 71.1 percent in the year-ago quarter, he said.
The asset quality of the bank has massively improved with gross bad loans printing in at a low 1.5% from 1.6% in sequentially and on-year and the net NPAs falling to 0.3%, flat sequentially and lower than 0.5% a year ago.
Provision coverage ratio improved to 83.3 from 71.2 in Q3 FY25 and 81 in the September quarter. Gross slippages declined to Rs 1,050 crore, or 1.6% of advances, the lowest level in eight quarters, while retail slippages fell to their lowest level in seven quarters.
Ahead of the earnings, the bank’s shares rose 2.2% to Rs 23.45. The stock has gained over 28% in the past 12 months, taking the bank’s market capitalisation to over Rs 73,600 crore.
The core profitability metric, net interest income, rose 10.9% to Rs 2,466 crore, supported by a steady improvement in margins that rose 20 bps and a lower cost of funds. Net interest margin (NIM), which is the net gain from loans, improved to 2.6% from with 2.4% a year earlier and 2.5% in the previous quarter.
Non-interest income rose 8% to Rs 1,633 crore, led by growth in core fee income, which rose nearly 10%. Fee growth was driven by card fees, loan processing charges and higher income from third-party products such as insurance and investment distribution.
Provisioning declined sharply during the quarter, with non-tax provisions at Rs 22 crore, compared to Rs 259 crore in the year-ago period and Rs 419 crore in Q2. As a result, net credit costs for the quarter were negligible.
Return on assets improved to 0.9% from 0.6%, while return on equity rose to 7.7% from 5.2% a year ago. Excluding the gratuity impact, RoA touched 1% during the quarter, a key milestone for the bank since its reconstruction, he said.
Net advances grew 5.2% to Rs 2.57 trillion, led by growth in commercial, corporate and institutional banking, and credit cards. Retail loans rose about 15%, while total disbursements stood at Rs 26,982 crore.
Total deposits increased 5.5% to Rs 2.93 trillion, with continued strong performance in low-cost deposits Casa which rose 8.5%, taking the Casa ratio to 34 compared to 33.1 a year earlier. Retail and branch-led deposits grew 9%, the bank said.