Yes Bank Q3 Net Profit Surges 45% QoQ to ₹952 Crore, Asset Quality Stable

Mumbai: Private sector lender Yes Bank Ltd. reported a robust 45% quarter-on-quarter jump in its standalone net profit to ₹951.62 crore for the third quarter ended December 31, 2025 (Q3 FY26), compared to ₹654.47 crore in the previous quarter (Q2 FY26). The profit also marked a significant 55% increase from the ₹612.27 crore reported in the same quarter last year.

Key Financial Highlights (Standalone Q3 FY26):

Net Profit: ₹951.62 crore (Up 45% QoQ, 55% YoY)
Net Interest Income (NII): ₹2,46,560 crore (Calculated)
Net Interest Margin (NIM): Improved sequentially.
Provisions: Sharp decline to ₹21.89 crore from ₹418.95 crore in Q2 FY25, aiding profitability.
Gross NPA Ratio: Stable at 1.5% (₹40,145.6 crore).
Net NPA Ratio: Improved to 0.3% (₹6,711.9 crore) from 0.3% (₹7,708.4 crore) in September 2025.
Capital Adequacy Ratio (Basel III): 14.5% (vs 15.0% in Q2).

Nine-Month Performance & Segment-Wise View:
For the nine-month period (9M FY26), the bank's net profit stood at ₹2,407.17 crore. A segmental breakdown shows the Corporate Banking segment was the most profitable, contributing ₹768.44 crore to the pre-tax profit. The Retail Banking segment, however, reported a pre-tax loss of ₹304.80 crore for the quarter, though this was an improvement from the ₹357.77 crore loss in Q2.

Update on the AT-1 Bonds Litigation:
The bank provided a crucial update on the long-standing legal battle over the write-down of Additional Tier-1 (AT-1) bonds in March 2020. Yes Bank stated that final arguments have commenced in the appeals filed by the Bank, the Reserve Bank of India (RBI), and the Central Government before the Supreme Court, challenging the Bombay High Court's 2023 judgment that set aside the write-down.

The Supreme Court has scheduled the next hearing for February 05, 2026. The bank maintains that the write-down was in accordance with regulations and estimates "there should not be any material financial impact." The final verdict will determine any future accounting impact.

Impact of New Labour Codes:
The bank recognized an additional liability of ₹155.43 crore (standalone) during the quarter due to the implementation of the new Labour Codes, which revised the definition of wages. This one-time provision impacted employee costs.

Management Statement:
The results were approved by the Board of Directors headed by Managing Director & CEO Prashant Kumar. The unaudited financial results have been subjected to a "Limited Review" by the joint statutory auditors, G.M. Kapadia & Co. and CNK & Associates LLP, who issued an unmodified report.

Outlook:
The steady profit growth, controlled provisions, and stable asset quality signal a period of consolidation and recovery for Yes Bank. All eyes will now be on the Supreme Court's ruling on the AT-1 bonds case, which remains a key overhang for the bank's stock.