Yes Bank Q1 profit rises 34% as asset quality improves, margins expand
Yes Bank posted a 34% jump in first-quarter net profit to ₹1,071 crore, signaling that the Indian lender's turnaround is increasingly driven by core operating performance rather than one-off treasury gains.
For the three months ending June 2026, Yes Bank recorded a net profit of ₹1,071 crore, up 33.7% year-on-year and edging up 0.2% sequentially from the prior quarter. The bottom line was supported by a 20 basis point annual expansion in net interest margins to 2.7%. Management attributed this margin improvement primarily to a lower cost of deposits and a reduction in the bank's balances of Priority Sector Lending shortfall deposits.
The bank's loan book expanded at a notably faster clip than its deposit base. Advances grew 18.3% year-on-year, accelerating to 4.3% on a quarterly basis, while deposit growth came in at 14.3% annually. On an Average Quarterly Balance basis, which smooths out volatility, advances rose 15.1% and deposits increased 14.8%. Retail disbursements were a particular bright spot, surging 27.5% year-on-year, indicating successful traction in higher-yielding segments.
Credit metrics showed continued stabilization, a critical factor for investor confidence in a lender still rebuilding its market standing. Gross non-performing assets fell 30 basis points year-on-year to 1.3%, while net non-performing assets dropped 10 basis points to 0.2%. Retail slippages hit their lowest level in ten quarters at ₹843 crore, representing 2.7% of advances. Net credit costs remained contained at 0.3% of average assets, matching the year-ago quarter.
The shift in earnings quality drew specific attention from management. “We delivered higher core earnings even as gains from Security Receipts and treasury fell sharply - clear evidence that the underlying franchise is strengthening,” said Vinay M. Tonse, Managing Director and CEO. Tonse also noted external validation through rating upgrades from Moody's, CARE, and ICRA, alongside an inaugural international rating from S&P Global.
Shares of Yes Bank closed at ₹23.53 on Friday ahead of the earnings release. For market participants, the first-quarter print underscores a gradual but measurable de-risking of the balance sheet paired with robust loan momentum. The bank's ability to maintain this trajectory will hinge on sustaining deposit growth to fund its expanding advance book without facing margin compression.
