Yes Bank has delivered a strong performance in the first quarter of FY25, posting a 59% year-on-year increase in net profit, reaching Rs. 391 crore. The growth was primarily supported by higher net interest income and reduced provisioning costs. As the bank continues its post-restructuring trajectory, improvements in asset quality and loan growth have bolstered investor confidence. Operating metrics also reflected positive momentum, with steady deposit accretion, credit expansion, and enhanced cost controls. This performance signals Yes Bank’s ongoing efforts to regain market standing while navigating a highly competitive and regulated financial landscape.
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Solid Profit Growth Marks a Turnaround Phase
Yes Bank posted a robust 59% jump in its consolidated net profit for the quarter ended June 30, 2025, coming in at Rs. 391 crore compared to Rs. 245 crore in the same quarter last year. This marks the bank’s eighth consecutive profitable quarter, underscoring a strengthening business model after years of consolidation and regulatory scrutiny.
The uptick in profitability was driven by a combination of core banking strength and strategic cost discipline. Net interest income (NII), a critical revenue metric, rose by 3.3% to Rs. 2,331 crore from Rs. 2,257 crore in the year-ago period. The net interest margin (NIM), however, declined slightly to 2.4% from 2.5%, reflecting changes in funding costs and asset mix.
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Asset Quality Improvement Supports Bottom Line
Yes Bank’s asset quality showed notable progress during the quarter. Gross non-performing assets (GNPA) as a percentage of total advances stood at 1.7%, a meaningful improvement from 2.2% a year earlier. Net NPAs declined to 0.6%, compared to 1.0% in the corresponding quarter last year.
Provisions and contingencies dropped significantly to Rs. 292 crore, down from Rs. 376 crore in Q1 FY24. This reduction in credit cost—combined with higher recoveries—played a vital role in lifting the bottom line. The provision coverage ratio remained stable at 83.4%, suggesting prudent risk management amid evolving macroeconomic conditions.
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Advances and Deposits Reflect Business Stability
Yes Bank’s loan book expanded moderately, with gross advances rising 14.4% year-on-year to Rs. 2.26 lakh crore. On a sequential basis, loan growth was recorded at 2.2%. Retail lending remained a key focus area, supported by growing traction in the SME and MSME segments.
Total deposits grew by 22.3% year-on-year, reaching Rs. 2.66 lakh crore, indicating growing depositor trust and improved franchise strength. The current account and savings account (CASA) ratio stood at 30.2%, compared to 30.3% in the same period last year, showing relative stability in the low-cost deposit base.
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Operating Performance and Capital Position
Non-interest income, which includes fees, commissions, and trading income, dipped slightly to Rs. 1,096 crore from Rs. 1,142 crore a year earlier, largely due to muted treasury gains. Operating expenses rose 8% year-on-year to Rs. 2,160 crore, mainly driven by branch expansion and digital investments. The cost-to-income ratio came in at 63.7%, marginally higher than 62.4% in the previous year.
On the capital front, the bank’s Common Equity Tier-1 (CET-1) ratio stood at 13.1%, while the overall capital adequacy ratio (CAR) was reported at 17.3%, well above regulatory norms. The bank reiterated its commitment to maintaining a strong capital buffer as it pursues growth without compromising asset quality.
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Digital and Strategic Outlook
Yes Bank continues to emphasize technology-led transformation. During the quarter, the bank witnessed higher adoption of its mobile banking and digital payment platforms. Management indicated plans to accelerate investments in AI-powered credit analytics, cybersecurity, and customer engagement tools over the next few quarters.
The bank’s focus on diversifying revenue streams, improving underwriting standards, and maintaining conservative liquidity coverage reflects a maturing strategy aimed at long-term sustainability. As competition intensifies in the Indian banking space, Yes Bank's disciplined recovery will likely determine its trajectory in the next phase of industry consolidation.
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Conclusion: A Cautiously Optimistic Road Ahead
Yes Bank’s Q1 results mark another milestone in its recovery journey, highlighting improved earnings visibility, healthier loan performance, and growing customer confidence. While challenges persist in terms of margin pressures and regulatory compliance, the bank’s steady improvement in fundamentals positions it favorably for the remainder of FY25. The management’s calibrated strategy and renewed focus on profitability over aggressive expansion may serve as a prudent model in the current financial climate.
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