Yes Bank Q2 profit up 65% to Rs 1,080 crore
Yes Bank Q2 profit up 65% to Rs 1,080 crore, but AT-1 ruling cuts pro-forma capital
Yes Bank, a private lender to households, small businesses and large companies, reported net profit of Rs 1,080 crore for Q2FY27 ended September 30, 2026, up 65% year-on-year, on October 17, 2026 . The same filing disclosed that the Supreme Court on October 15, 2026 upheld the Bombay High Court judgment relating to the write-down of Rs 8,415 crore of Additional Tier 1 bonds and dismissed the appeals; the bank recognised no impact in these results pending assessment of the implications .
Core income lifted profit while costs ticked up
Managing Director and CEO Vinay M. Tonse said performance was supported by healthy growth in core operating income and continued improvement in asset quality . Profit growth was strong year-on-year but flat sequentially, as net interest income and core fees carried the quarter.
Source: .
| Metric (Rs crore) | Q2FY27 | Q1FY27 | Q2FY26 |
|---|---|---|---|
| Total net income | 4,704 | 4,584 | 3,945 |
| Net interest income | 2,822 | 2,786 | 2,301 |
| Non-interest income | 1,882 | 1,798 | 1,644 |
| Operating costs | 3,026 | 2,880 | 2,649 |
| Operating profit | 1,678 | 1,704 | 1,296 |
| Net profit | 1,080 | 1,071 | 654 |
Source: .
| Profitability (%) | Q2FY27 | Q1FY27 | Q2FY26 |
|---|---|---|---|
| Net interest margin | 2.6 | 2.7 | 2.5 |
| Cost-to-income | 64.3 | 62.8 | 67.1 |
| Return on assets, annualised | 0.9 | 0.9 | 0.6 |
| Return on equity, annualised | 8.2 | 8.3 | 5.4 |
Net interest margin held up from last year
Margin improved year-on-year but eased sequentially, as lower funding costs offset weaker loan yields. Management has tied this pattern to deposit repricing, rundown of low-yielding priority-sector shortfall deposits and better CASA mix, with an aspiration to move toward above 3% over two years .
Source: .
| Margin driver (%) | Q2FY27 | Q1FY27 | Q2FY26 |
|---|---|---|---|
| Yield on advances | 8.9 | 9.1 | 9.5 |
| Cost of funds | 5.7 | 5.7 | 6.0 |
| Cost of deposits | 5.5 | 5.4 | 5.7 |
On a normalised basis excluding priority-sector shortfall deposits, the bank put Q2FY27 margin at 2.9% versus 2.6% reported, with those mandated deposits at 5.0% of assets .
Fees leaned more on retail and disbursement-linked lines
Core fees strengthened sequentially and retail became a larger share. Loan processing fees benefited from disbursement momentum, including retail and foreign-currency term loans. Card fees also grew, while trade income included income from those foreign loans in Q2FY27 .
Source: .
| Fee line | Q2FY27 | Q1FY27 | Q2FY26 |
|---|---|---|---|
| Core fees (Rs crore) | 1,726 | 1,506 | 1,494 |
| Retail share in core fees (%) | 57.2 | 53.7 | 55.5 |
| Card fees (Rs crore) | 325 | 291 | 257 |
| Loan processing and prepayment (Rs crore) | 305 | 235 | 261 |
Costs rose after a tight prior quarter
Cost-to-income improved year-on-year but ticked up sequentially as expenses grew faster than income. The bank put operating expense to average assets at 2.5% .
The bank highlighted three items included in Q2FY27 costs. These were Rs 51 crore of commissions on foreign-currency borrowings linked to FCNR mobilisation, Rs 20 crore of marketing for Asian Games sponsorship and Rs 31 crore from changes in Central and state wage codes . This followed Q1FY27, when management had stressed sustained cost discipline and operating leverage .
Headline loan and deposit growth includes one-off foreign inflow
The bank crossed balance-sheet milestones in the quarter, with total assets above Rs 5 lakh crore, deposits above Rs 3.5 lakh crore and advances above Rs 3 lakh crore . Both advances and deposits were partly aided by FCNR deposits, which are foreign-currency deposits from non-residents .
Source: .
| Balance sheet | September 30, 2026 | June 30, 2026 | September 30, 2025 |
|---|---|---|---|
| Advances (Rs crore) | 3,09,510 | 2,85,118 | 2,50,212 |
| Deposits (Rs crore) | 3,54,004 | 3,15,373 | 2,96,276 |
| Credit-deposit ratio (%) | 87.4 | 90.4 | 84.5 |
FCNR mobilisation under the RBI concessional swap window was Rs 18,575 crore, about US$194.00 crore, with related foreign-currency term loans of Rs 15,215 crore . Excluding those loans, advances growth was 17.6% year-on-year and 3.2% quarter-on-quarter, and the credit-deposit ratio, loans divided by deposits, was 83.1% rather than 87.4% . Borrowings rose mainly from the GIFT City international unit for this mobilisation, and standard-asset provisions were higher on strong advance growth including these loans .
Disbursements run ahead of retail book
Disbursements excluding foreign loans accelerated sharply year-on-year, with retail at about 47% of the total . Retail book growth lagged disbursements, a gap management has earlier linked to run-offs after slowing the book in FY24-FY25 and to a secured-heavy guardrail .
Source: .
| Advances by segment, excluding foreign-currency term loans (Rs crore) | September 30, 2026 | June 30, 2026 | September 30, 2025 |
|---|---|---|---|
| Retail banking | 1,31,252 | 1,27,147 | 1,20,802 |
| Commercial banking | 75,043 | 69,743 | 62,430 |
| Corporate and institutional | 88,000 | 88,228 | 66,980 |
These segments total Rs 2,94,295 crore at September 30, 2026; separate foreign-currency term loans of Rs 15,215 crore take total advances to Rs 3,09,510 crore .
Source: .
| Disbursements ex-foreign loans (Rs crore) | Q2FY27 | Q1FY27 | Q2FY26 |
|---|---|---|---|
| Total disbursements | 36,773 | 33,945 | 24,507 |
Commercial banking, largely small and mid-sized business, stayed strong, while corporate and institutional banking grew strongly year-on-year but was flat sequentially . On the Q1FY27 call, management said underlying loan growth on average balances was 15% to 16% and it aimed to grow a little above industry, led by liabilities rather than chasing assets without deposits .
Branch deposits anchor funding but low-cost share fell
Retail and branch-led deposits remained the anchor at 58.8% of total deposits, supported by 1,336 branches and 249 business-correspondent outlets . Period-end low-cost deposits grew more slowly than term and wholesale inflows, so the headline CASA ratio fell even as average balances were stronger .
Source: .
| Funding | September 30, 2026 | June 30, 2026 | September 30, 2025 |
|---|---|---|---|
| Retail and branch-led deposits (Rs crore) | 2,07,985 | 1,86,691 | 1,71,978 |
| CASA deposits (Rs crore) | 1,06,175 | 1,03,233 | 99,708 |
| CASA ratio (%) | 30.0 | 32.7 | 33.7 |
Average-balance CASA growth was 15.5% year-on-year, led by current accounts . Adjusted for FCNR inflows, the retail and branch CASA ratio was stable sequentially at 39.7% versus 36.2% reported .
Bad loans eased and recoveries supported profit
Gross bad loans improved as a share of advances while net bad loans were steady. Fresh slippages fell as a share of loans and retail slippages steadied well below last year, with retail bad loans at 2.1% .
Source: .
| Asset quality | Q2FY27 | Q1FY27 | Q2FY26 |
|---|---|---|---|
| Gross NPA (%) | 1.2 | 1.3 | 1.6 |
| Net NPA (%) | 0.2 | 0.2 | 0.3 |
| Gross slippages (Rs crore) | 1,035 | 964 | 1,248 |
| Retail slippages (Rs crore) | 891 | 843 | 1,221 |
Provision coverage was 80.5% and net credit costs, the cost of bad loans scaled by assets, were about 0.3% annualised . Recoveries and upgrades helped profit, with a larger contribution from security receipts than in recent quarters.
Source: .
| P and L gain from security receipts (Rs crore) | Q2FY27 | Q1FY27 | Q2FY26 |
|---|---|---|---|
| Gain | 395 | 86 | 220 |
Total recoveries and upgrades were Rs 954 crore in Q2FY27, with first-half security-receipt gains at Rs 481 crore . Standard restructured loans fell to Rs 219 crore and the 31-90 day overdue book eased year-on-year to Rs 2,655 crore . In July, management had guided for Rs 800 crore to Rs 1,000 crore of full-year FY27 gains from this portfolio, tied to JC Flower ARC execution .
Court order leaves capital question despite steady buffers
The bank said no impact from the judgment has been recognised pending assessment of accounting, regulatory and legal steps . These bonds are loss-absorbing bank capital that can be cancelled in stress. The pro-forma figures below are indicative, unaudited and subject to revision .
Source: .
| Q2FY27 parameter | As reported | Pro-forma at September 30, 2026 |
|---|---|---|
| Net profit (Rs crore) | 1,080 | -5,217 |
| CET-1 (%) | 13.7 | 11.4 |
| Return on assets (%) | 0.9 | -4.3 |
Reported capital eased sequentially but stayed above minimum requirements. Risk density improved year-on-year and priority-sector shortfall deposits fell to 5.0% of assets .
Source: .
| Capital and liquidity (%) | Q2FY27 | Q1FY27 | Q2FY26 |
|---|---|---|---|
| CET-1 | 13.7 | 14.0 | 13.9 |
| CRAR | 14.5 | 15.1 | 15.6 |
| Average liquidity coverage | 131.4 | 138.2 | 125.1 |
The bank said it is evaluating options to strengthen buffers to support growth and align progressively with peers . In July, management had said a 14% CET-1 ratio provided capital for at least the next year of growth, with internal accruals and deferred-tax unwind helping, and that any raise would be opportunistic in the 13% handle . Support factors cited were upgrades to CRISIL AA+ Stable and India Ratings AA+ Stable in the quarter, and Sumitomo Mitsui Banking Corporation holding 24.9% as largest shareholder . The investor call is scheduled for October 19, 2026 .
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