Yes Bank profit jumps 92%—Stock consolidates near Rs 18 as FIIs and DIIs ramp up bets on turnaround

Yes Bank FY25 profit jumps 92% to ₹2,406 crore as asset quality improves, institutional investors increase stake

Yes Bank reported a net profit of ₹2,406 crore for the financial year ended March 31, 2025, marking a 92.3% year-on-year increase. For the March quarter alone, profit rose to ₹738 crore, up 63.3% year-on-year and 20.6% sequentially. The performance was underpinned by rising interest income, robust fee generation, improving asset quality, and lower provisioning costs. This marks the highest full-year profit since the bank’s restructuring in March 2020.

Net interest income for FY25 rose 10.5% year-on-year to ₹8,944 crore, while net interest margin held steady at 2.4% for the year and rose to 2.5% in Q4FY25. The margin improvement was largely due to a reduction in high-cost borrowings and growth in low-cost deposits. Non-interest income also saw a 14.5% year-on-year jump, reaching ₹5,857 crore, with corporate banking, forex, and insurance fee income contributing to the momentum.

The cost-to-income ratio improved sharply to 67.3% in Q4FY25 from 75.8% in Q4FY24. For FY25, the ratio stood at 71.3%, down from 74.4% in the previous year, indicating continued focus on cost efficiency.

Has Yes Bank’s asset quality reached its strongest position since 2020?

Yes Bank’s asset quality improved across key metrics in FY25. Gross non-performing assets (GNPA) declined to 1.6% as of March 2025, while net NPA dropped to 0.3%, compared to 0.6% a year earlier. Provision coverage ratio (PCR), including technical write-offs, improved to 87.6% in Q4FY25.

Restructured advances fell to ₹424 crore—just 0.2% of total advances—while the net carrying value of security receipts dropped to nil, reflecting a full clean-up of legacy exposures. Recoveries and upgrades for FY25 totalled ₹5,923 crore, with ₹1,480 crore in Q4FY25 alone.

Slippages also showed signs of moderation. Gross slippages for Q4FY25 stood at ₹1,223 crore (2.0% of advances), down from ₹1,348 crore in the previous quarter. Net slippages were ₹696 crore in Q4FY25, and ₹2,755 crore for the full year.

What’s driving Yes Bank’s balance sheet expansion?

Total advances rose 8.1% year-on-year to ₹2.46 lakh crore in FY25, led by 23.6% growth in SME lending and a 21.8% rise in mid-corporate advances. Corporate lending grew 11.5% year-on-year, while retail advances remained flat year-on-year, reflecting a calibrated approach to profitability over growth.

On the liabilities side, deposits grew 6.8% year-on-year to ₹2.84 lakh crore, with the CASA (Current Account Savings Account) ratio rising 340 basis points year-on-year to 34.3%. CASA deposits grew 18.4% year-on-year, with savings deposits increasing 32.1% and current account balances rising 20.5%. Retail and branch banking-led deposits accounted for ₹1.67 lakh crore, up 17.9% year-on-year.

The bank’s capital adequacy remains healthy, with CET 1 at 13.5% and total CRAR at 15.6%. Liquidity Coverage Ratio (LCR) stood at 125.0% during Q4FY25.

How are institutional investors responding to Yes Bank’s turnaround?

Yes Bank’s stock has been consolidating near the ₹18 mark over the past few weeks, trading within a narrow band between ₹17.72 and ₹18.15. This reflects investor caution even as operational performance has improved significantly. Analysts suggest that a breakout above ₹18.20 could trigger a move toward ₹21, provided broader market sentiment holds steady.

Foreign institutional investors (FIIs) have increased their holdings slightly, from 26.74% to 26.88% during the March 2025 quarter. Domestic institutional investors (DIIs) raised their stake more substantially, from 38.9% to 39.5%. Among them, mutual funds doubled their exposure, signaling rising confidence in the bank’s growth trajectory.

The stock’s current price-to-earnings (P/E) ratio stands at approximately 25.9, which is considered high for the sector. This suggests limited near-term upside unless the bank sustains strong earnings growth or re-rates based on continued asset quality improvement and margin expansion.

What are analysts saying—buy, sell, or hold?

From a sentiment perspective, institutional flows are leaning positive, with rising DII participation and a slight uptick in FII interest. However, given the stock’s current valuation and consolidation zone, many analysts recommend a ‘Hold’ stance with a bullish bias. A confirmed breakout above ₹18.20 could warrant a ‘Buy’ call, especially if accompanied by strong volumes and broader market strength.

Yes Bank’s retail investor base remains one of the largest in India, and the bank continues to attract investor attention due to its improving profitability, enhanced governance, and digital focus.

The strategic clean-up of stressed assets, progress in retail and SME franchise expansion, and regulatory clearance for handling GST collections have all contributed to strengthening its long-term outlook.

What’s ahead for Yes Bank in FY26?

CEO Prashant Kumar said that Q4 marked a pivotal quarter in the bank’s profitability roadmap, achieving full priority sector lending compliance, reducing gross and net NPAs to post-2020 lows, and eliminating security receipt balances. The bank also rolled out seamless GST payment services, further building its digital ecosystem.

With over ₹97,000 crore in fresh disbursements during FY25, a CASA ratio at a five-year high, and strong ESG ratings from both S&P Global and CDP, Yes Bank’s repositioning appears to be gaining credibility among institutional investors.

Analysts and investors will be watching for the next leg of growth—particularly margin expansion, fee income growth, and reduction in credit costs. A stable macro environment and rate trajectory could provide the tailwind needed for Yes Bank to break out of its current consolidation phase.