YES Bank reports 59% YoY profit growth in Q1 FY26 along with asset quality improvements and a stronger CASA ratio. Here’s what it means for investors.
🏦 YES Bank Q1 FY26 Results: Revival in Motion?
YES Bank has released its Q1 FY26 earnings—and the numbers suggest a bank that’s steadily getting back on its feet. After navigating rough waters in the past, is YES Bank finally on a growth trajectory worth your attention?
Let’s break it down.
📈 Snapshot of Key Financials
| Indicator | Q1 FY26 | Q4 FY25 | Q1 FY25 | YoY | QoQ |
|---|---|---|---|---|---|
| Net Profit | ₹801 Cr | ₹738 Cr | ₹502 Cr | 59.4% | 8.5% |
| Net Interest Income | ₹2,371 Cr | ₹2,276 Cr | ₹2,244 Cr | 5.7% | 4.2% |
| Non-Interest Income | ₹1,752 Cr | ₹1,739 Cr | ₹1,199 Cr | 46.1% | 0.7% |
| Operating Profit | ₹1,358 Cr | ₹1,314 Cr | ₹885 Cr | 53.4% | 3.3% |
| Earnings Per Share | ₹0.26 | ₹0.24 | ₹0.16 | 55.4% | 8.5% |
💡 Investor Insight: This marks the bank’s seventh straight quarter of profit growth—something we haven’t seen in years.
💰 Efficiency & Margins – Moving in the Right Direction
- Net Interest Margin (NIM): Held steady at 2.5%, up from 2.4% last year.
- Cost-to-Income Ratio: Improved to 67.1% from 74.3% a year ago.
- Return on Assets (ROA): Rose to 0.8% from 0.5% YoY.
📊 Hook: Lower costs, stable margins, and improving returns—YES Bank is making every rupee work harder.
🧾 Balance Sheet Overview
| Metric | Q1 FY26 | QoQ Change | YoY Change |
|---|---|---|---|
| Net Advances | ₹2.41 L Cr | ▼ 2.1% | ▲ 5.0% |
| Deposits | ₹2.76 L Cr | ▼ 3.1% | ▲ 4.1% |
| CASA Ratio | 32.8% | ▼ from 34.3% | ▲ from 30.8% |
| CET-1 Capital | 14.0% | Up from 13.5% | Up from 13.3% |
🏦 Key Thought: While growth has moderated QoQ, the bank’s strong capital and retail focus provide comfort.
🛡️ Asset Quality – Stabilizing Further
- Gross NPA: 1.6% (flat sequentially, down YoY)
- Net NPA: 0.3% (unchanged QoQ, improved YoY)
- Provision Coverage: Rose to 88%
- Restructured Loans: Minimal at just 0.2% of total advances
💬 Takeaway: The bad loan burden is no longer a red flag. YES Bank has cleaned up significantly.
🔔 Strategic & Operational Updates
- Major credit rating upgrades from Moody’s, ICRA, and CARE
- Sumitomo Mitsui Banking Corp (SMBC) set to acquire ~20% stake from Indian banks
- Recognized among India’s best workplaces in banking
- Launched new tax and duty payment services to enhance digital offerings
✅ Investor Trigger: Large institutional interest (SMBC deal) and improved ratings point to renewed confidence.
⚖️ What’s Working & What Needs Attention
👍 What’s Going Well:
- Consistent profit growth
- Controlled costs and improved profitability metrics
- Cleaner loan book with high provision coverage
- Backing from a global financial powerhouse
👀 What to Monitor:
- QoQ drop in deposit and loan book
- Slight rise in slippages (₹1,458 Cr in Q1)
- Ongoing pressure on cost containment
📊 Valuation View
- Book Value per Share: ₹15.5
- Stock Price: ₹23–24 range
- P/B Ratio: ~1.5x
- P/E Ratio (TTM): ~25x
🔍 Conclusion: Valuations are no longer distressed, but not too expensive either—especially given the improving fundamentals.
📌 Final Word – Should You Buy YES Bank?
YES Bank’s Q1 FY26 results suggest that its long road to recovery may be nearing a more stable path. Solid capital ratios, cleaner assets, and rising profitability are laying the foundation for future growth.
👀 Call to Action: If you’ve been watching YES Bank from the sidelines, this might be the quarter that changes your mind. But keep an eye on growth consistency in the next few quarters.
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