YESBANK - Yes Bank

📊 NSE: YESBANK 🏢 Banks - Private Sector 📅 Last Updated: 12/14/2025 15:21

💰 Financial Performance

Revenue Growth by Segment

Advances grew 6.4% YoY to INR 250,212 Cr in Q2FY26. The book is dominated by Retail and Commercial segments which form 74% of gross advances, while Corporate Banking accounts for the remaining 26%. Retail disbursements grew 19.8% QoQ in Q2FY26.

Geographic Revenue Split

100% of revenue is derived from India, where the bank operates a network of 1,253 branches as of June 30, 2025.

Profitability Margins

Net Interest Margin (NIM) improved to 2.5% in Q2FY26 from 2.4% in Q2FY25. Return on Assets (RoA) stood at 0.6% (annualized) and Return on Equity (RoE) at 5.4% (annualized) for Q2FY26.

EBITDA Margin

Operating Profit grew 32.9% YoY to INR 1,296 Cr in Q2FY26, though it declined 4.5% QoQ. The Cost-to-Income (C/I) ratio improved significantly to 67.1% in Q2FY26 from 73.0% in Q2FY25.

Capital Expenditure

Total Capital Funds stood at INR 47,941 Cr as of September 30, 2025. The bank maintains a CET 1 Ratio of 13.9%, up from 13.2% YoY, supporting future growth without immediate capital dilution.

Credit Rating & Borrowing

CRISIL maintains a 'Stable' outlook. ICRA upgraded ratings citing steady increase in scale and declining stressed assets. Borrowings reduced 20.9% YoY to INR 61,955 Cr as of Q2FY26.

⚙️ Operational Drivers

Raw Materials

The primary 'raw material' for the bank is its deposit base, specifically CASA (Current Account Savings Account) which grew 12.5% YoY to INR 99,708 Cr, and Term Deposits.

Import Sources

100% of deposits are sourced domestically from the Indian market through its branch network and digital channels.

Key Suppliers

Key institutional 'suppliers' of capital and stability include State Bank of India (SBI) and Sumitomo Mitsui Banking Corporation (SMBC), which is acquiring a significant stake.

Capacity Expansion

Current capacity includes 1,253 branches as of June 2025. Expansion is focused on digital 'capacity' through rapid digitalization and merchant acquiring platforms.

Raw Material Costs

Cost of funds is managed through the CASA ratio, which improved to 33.7% in Q2FY26 from 32.0% in Q2FY25, reducing reliance on high-cost wholesale borrowings.

Manufacturing Efficiency

Credit-to-Deposit (C/D) ratio stood at 84.5% in Q2FY26, compared to 84.8% in Q2FY25, indicating stable utilization of the deposit base for lending.

Logistics & Distribution

Distribution is handled through 1,253 physical branches and a 'Rapid Digitalization' strategy including YES Tax Pay and mobile banking.

📈 Strategic Growth

Expected Growth Rate

6.40%

Growth Strategy

Growth will be driven by the acquisition of a stake by Sumitomo Mitsui Banking Corporation (SMBC), a shift toward granular Retail/SME loans (now 74% of book), and digital scaling through products like YES Tax Pay and merchant acquiring.

Products & Services

Retail loans, corporate banking, credit cards, merchant acquiring, transaction banking, and digital tax payment suites (YES Tax Pay).

Brand Portfolio

YES BANK, YES Securities, YES Tax Pay.

New Products/Services

YES Tax Pay (integrated tax collection suite) and expanded digital merchant acquiring services are expected to drive non-interest income, which grew 16.9% YoY to INR 1,644 Cr.

Market Expansion

Focus on rural India through employment initiatives targeting 100,000 individuals by 2026 and scaling the Commercial Banking segment which shows sustained traction.

Market Share & Ranking

Total assets of INR 4,29,035 Cr as of September 2025, positioning it as a significant new-age private sector bank in India.

Strategic Alliances

Strategic partnership and stake acquisition by Sumitomo Mitsui Banking Corporation (SMBC) from SBI and other banks announced in May 2025.

🌍 External Factors

Industry Trends

The industry is shifting toward granular, retail-led lending and digital-first banking. Yes Bank is positioned with a 74% granular book and a dedicated Chief Digital Officer.

Competitive Landscape

Competes with other private sector banks for CASA deposits and high-quality retail assets in a tightening liquidity environment.

Competitive Moat

Moat is built on a unique turnaround story, a strong digital ecosystem (YES Tax Pay), and the backing of major financial institutions (SBI/SMBC), which is sustainable due to high capital buffers (CET 1 13.9%).

Macro Economic Sensitivity

Highly sensitive to Indian GDP growth as the 'fastest growing major economy' and interest rate cycles which impact NIM and deposit costs.

Consumer Behavior

Increasing shift toward digital banking and e-governance payments, which the bank is capturing via SNA and GeM strategic projects.

Geopolitical Risks

Japanese investment via SMBC introduces international regulatory and geopolitical alignment risks, though it strengthens capital access.

⚖️ Regulatory & Governance

Industry Regulations

Operates under the Banking Regulation Act 1949 and RBI reconstruction schemes. Adheres to Basel III capital regulations with a 13.9% CET 1 ratio.

Environmental Compliance

Sanctioned INR 7,357 Cr for renewable energy projects in FY25. Achieved 39% reduction in emission intensity of electricity generation portfolio since FY22.

Taxation Policy Impact

Provision for taxation was INR 223 Cr in Q2FY26, an 18.3% decrease QoQ but a 78.3% increase YoY.

Legal Contingencies

The bank faced a significant historical write-down of Basel III Tier I bonds totaling INR 8,415 Cr as part of its 2020 restructuring, which remains a key credit profile factor.