- Yes Bank's Q4 profit rose 45% year-on-year to Rs 1,068 crore
- Net interest income increased 16% year-on-year to Rs 2,638 crore
- Gross NPAs fell to Rs 3,605 crore, with the ratio improving to 1.3%
Yes Bank shares swung in early trade after the lender reported a rise in fourth-quarter profit, stronger net interest income and lower bad loans, while management set out loan growth and profitability targets for the year ahead.
The stock rose as much as Rs 20.82, up 3.1%, before reversing course to fall as much as 0.5% to Rs 20.10. The moves came after the bank announced its March-quarter results on Saturday.
The results point to a continued clean-up in the balance sheet and higher profitability, helped by lower funding costs, stronger margins and reduced stress assets. Management said it aims to grow loans in line with the industry while lifting returns further over the next two to three years.
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Profit Rises, Core Income Expands
Profit after tax rose 45% year-on-year to Rs 1,068 crore in Q4FY26 from Rs 738 crore a year earlier. It increased 12% from the previous quarter.
Net interest income, a key measure of lending income minus interest paid, rose 16% year-on-year to Rs 2,638 crore from Rs 2,276 crore. It was up 7% quarter-on-quarter.
Operating profit climbed 23% from a year earlier to Rs 1,618 crore and rose 31% from the December quarter.
Total income stood at Rs 9,381 crore versus Rs 9,355 crore a year earlier, while interest income came at Rs 7,651 crore versus Rs 7,616 crore.
Margins Improve, Funding Costs Ease
The bank said margin improvement was driven by front-loading of deposit repricing, continued outperformance in CASA deposits and a sustained reduction in high-cost borrowings.
Interest expense fell 6% year-on-year to Rs 5,013 crore from Rs 5,340 crore.
Return on assets improved to 1% from 0.9% in the previous quarter, meeting management guidance for the full year. Management said it now aims to improve return on assets by another 25 to 50 basis points over the next two to three years.
The lender also said it is targeting a net interest margin of 3.25% to 3.5% over the same period.
Bad Loans Decline
Gross non-performing assets fell to Rs 3,605 crore from Rs 4,015 crore in the previous quarter. Net non-performing assets declined to Rs 653 crore from Rs 671 crore.
The gross NPA ratio improved to 1.3% from 1.5%, while the net NPA ratio eased to 0.2% from 0.3%.
Provisions were Rs 188 crore against Rs 318 crore a year earlier. The bank said it had also made a one-time standard asset provision of Rs 341 crore to strengthen coverage.
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FY27 Growth Plans
Management said it is aiming for overall loan growth of 13% to 15% next year, in line with industry growth.
It is targeting 20% growth in corporate loans, 18% in commercial banking and double-digit growth in retail loans.
The bank said it expects the downward trend in the cost-to-income ratio to continue. It also guided for recoveries of Rs 800 crore to Rs 1,000 crore from security receipts next year.
Management said it expects a reduction of Rs 6,500 crore to Rs 9,000 crore in RIDF balances next year and plans to add about 80 branches a year, or around 400 branches over four to five years.
The lender said its focus over the next three years will remain on consistent profits, asset quality, retail granularity and higher returns.
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