The bank’s strategic focus on expanding its retail and SME portfolios, coupled with disciplined cost management, has yielded positive results, reinforcing its position as a key player in the Indian banking sector.

Key Highlights of Q3FY25 Performance

Profitability and Operational Efficiency

YES Bank reported a net profit of INR 612 crores for Q3FY25, a remarkable 164.5% year-on-year (Y-o-Y) increase and a 10.7% quarter-on-quarter (Q-o-Q) growth. This marks the fifth consecutive quarter of sequential profitability expansion, with the Return on Assets (RoA) improving to 0.6%, up from 0.2% in Q3FY24 and 0.5% in Q2FY25.

The bank’s operating profit stood at INR 1,079 crores, reflecting a 24.9% Y-o-Y growth and a 10.6% Q-o-Q increase. This growth was driven by a combination of higher net interest income (NII) and non-interest income, along with effective cost management. The cost-to-income ratio improved to 71.1%, down from 73.1% in Q3FY24 and 73.0% in Q2FY25, indicating better operational efficiency.

Net Interest Income and Margins

The bank’s Net Interest Income (NII) grew by 10.2% Y-o-Y to INR 2,224 crores, while Net Interest Margins (NIMs) remained stable at 2.4% on both a Y-o-Y and Q-o-Q basis. The steady NIMs reflect the bank’s ability to maintain a balanced growth trajectory despite competitive pressures in the banking sector.

Non-Interest Income and Fee Income

YES Bank’s non-interest income saw a significant 26.6% Y-o-Y growth, reaching INR 1,512 crores, driven by strong performance in fee-based income streams. The bank’s focus on granular and transactional fee income has paid off, contributing to the overall growth in profitability.

Deposit Growth and CASA Expansion

The bank continued its strong momentum in deposit accretion, with total deposits growing by 14.6% Y-o-Y to INR 2,77,224 crores. The CASA (Current Account and Savings Account) ratio improved to 33.1%, up from 29.7% in Q3FY24 and 32.0% in Q2FY25. This growth was driven by a 21.1% Y-o-Y increase in current account balances and a 33.3% Y-o-Y growth in savings account balances. The bank’s focus on retail and branch banking-led deposits has been a key driver of this expansion.

Advances Growth and Diversification

YES Bank’s net advances grew by 12.6% Y-o-Y to INR 2,44,834 crores, with strong growth in the SME (26.7% Y-o-Y), Mid Corporate (26.7% Y-o-Y), and Corporate (26.8% Y-o-Y) segments. The retail advances growth remained flat Q-o-Q, in line with the bank’s strategy to improve profitability in this segment. The diversified loan book, with a mix of Retail & SME: Mid Corp.: Corp. at 58:16:26, reflects the bank’s balanced approach to risk management and growth.

Asset Quality Improvement

The bank’s asset quality continued to improve, with the Gross NPA (GNPA) ratio declining to 1.6%from 2.0% in Q3FY24. The Net NPA (NNPA) ratio stood at 0.5%, down from 0.9% in Q3FY24. The Provision Coverage Ratio (PCR) improved to 71.2%, up from 56.6% in Q3FY24, indicating stronger provisioning buffers. The bank also reported recoveries and resolutions of INR 1,843 crores in Q3FY25, contributing to the overall improvement in asset quality.

Strategic Initiatives and Achievements

YES Bank launched several strategic initiatives during the quarter, including the introduction of YES Business, a new-age business banking app designed to empower MSMEs with over 100 features. The bank also received approval from the Reserve Bank of India (RBI) for the appointment of Mr. Manish Jain as Executive Director, further strengthening its leadership team. Additionally, YES Bank was certified as a ‘Great Place to Work’ for the third consecutive year, highlighting its commitment to fostering a positive work environment.

Management Commentary

Mr. Prashant Kumar, Managing Director & CEO of YES Bank, commented on the results, stating, “Q3FY25 is the fifth quarter in a row where the Bank has demonstrated sustained sequential expansion in profitability. The RoA of the Bank has also expanded to 0.6% from 0.5%, reported over the last three quarters. It is quite encouraging that we have also started seeing expansion in our Operating Profitability.” He highlighted the reduction in balances of deposits placed in lieu of PSL shortfalls and the flat retail segment slippages as key factors driving the bank’s profitability.

Outlook

YES Bank’s Q3FY25 results reflect a strong turnaround story, with consistent improvements in profitability, asset quality, and operational efficiency. The bank’s strategic focus on retail and SME segments, coupled with its disciplined approach to cost management, positions it well for sustained growth in the coming quarters. With a robust balance sheet and a clear growth strategy, YES Bank is poised to capitalize on emerging opportunities in the Indian banking sector.

Conclusion

YES Bank’s Q3FY25 performance underscores its resilience and ability to navigate challenging market conditions. The bank’s focus on profitability, asset quality, and strategic growth initiatives has yielded positive results, reinforcing its position as a key player in the Indian banking landscape. As YES Bank continues to execute its strategic objectives, it is well-positioned to deliver value to its stakeholders in the long term.