Yes Bank delivered robust financial performance in Q3FY26, reporting a significant 55% year-on-year increase in standalone net profit to ₹952.00 crore, compared to ₹612.00 crore in the corresponding quarter of the previous year. Following the strong results, management provided comprehensive forward guidance on profitability targets, security receipt recoveries, credit cost expectations, and loan growth projections during the earnings call.

Financial Performance Highlights

The bank's quarterly performance showed impressive growth across key metrics:

Sequential growth was equally strong, with profit after tax rising 45% from ₹654.00 crore in Q2FY26. Interest income stood at ₹7,543.00 crore, down 3.7% from ₹7,829.00 crore in the year-ago period.

Asset Quality and Operational Metrics

Yes Bank continued to demonstrate improving asset quality with significant reductions in non-performing assets:

The bank's return on assets improved to 0.90% from 0.60% in Q3FY25, with the metric reaching 1.00% when excluding gratuity impact. Cost of deposits declined 50 basis points year-on-year and 10 basis points quarter-on-quarter to 5.60%.

Management Guidance and Strategic Outlook

During the earnings call, management provided comprehensive guidance on future profitability targets and loan growth expectations:

Loan Growth and Business Strategy

Management outlined specific loan growth projections and strategic focus areas:

The bank expects loan growth for the current financial year to be around 8%, with next year's growth anticipated to align with market trends, excluding specific product categories like prime home loans, new car financing, and gold loans.

Credit Cost and Recovery Guidance

The bank expects its net credit cost, non-tax provisions to assets, to remain below 50 basis points for the full year, consistent with prior guidance. Additionally, management provided detailed guidance on security receipt recoveries:

Managing Director & CEO Prashant Kumar characterized Q3FY26 as a "breakthrough quarter," highlighting accelerated profitability growth, strong improvement in asset quality, rising business volumes, and continued leadership in CASA growth. The guidance reflects management's confidence in sustaining positive momentum across profitability, recovery metrics, and credit cost management.

Stock Performance and Valuation

Yes Bank shares gained 2.23% on Friday, closing at ₹23.46. The stock's current valuation metrics include:

Technical indicators show the stock trading above all eight key simple moving averages, indicating strong bullish momentum. The RSI of 64.20 suggests the stock is approaching overbought territory, warranting careful monitoring by investors.

Domestic mutual funds have significantly increased their stake in Yes Bank , reaching levels not seen since before the 2019 banking crisis, even as retail investor participation shows signs of decline.

Mutual Fund Holdings Reach Pre-Crisis Levels

Based on the December quarter shareholding pattern filed with the Bombay Stock Exchange for the October-December period, mutual funds held a 3.58% stake in Yes Bank. This marks the highest level since December 2019, when these funds maintained a 5.09% stake, just before a liquidity crisis led the Reserve Bank of India to place the lender under moratorium and initiate a rescue plan.

Notably, no single mutual fund holds a stake greater than 1% in the lender as of December 2025, as their names do not appear in the list of public shareholders.

Strategic Partnership with SMBC

In May, Yes Bank signed a significant deal with Sumitomo Mitsui Banking Corporation of Japan, where SMBC acquired an initial 20% stake. The consortium of lenders, led by State Bank of India, sold their holdings for over ₹14,000 crore ($1.60 billion). SMBC subsequently increased its stake to the current level of 24.9%, with the Japanese bank's name featuring in the list of public shareholders.

Retail Shareholding Declines to Two-Year Low

While mutual fund participation has strengthened, retail shareholding has experienced a steady decline over the last two quarters. The retail shareholding dropped to 20.7% in the December quarter from 22.5% in June 2025, marking the lowest level since March 2024.

Despite this decline, Yes Bank continues to maintain significant retail investor participation, with the number of retail shareholders remaining above the 60 lakh mark since March 2024. Retail shareholders are defined as those with authorized share capital of up to ₹2.00 lakh.

Market Performance

Shares of Yes Bank closed 2.20% higher on Friday at ₹23.45. The stock has gained 24.00% over the last 12 months and was set to react to quarterly results reported on Saturday.