The private lender is expected to deliver high single-digit to low double-digit growth in net interest income (NII) in Q3FY26, with estimates clustering between 9% and nearly 12% YoY. Net profit (PAT) forecasts, however, span a much wider band—from low single-digit growth to as much as 27% YoY, reflecting divergent assumptions on credit costs, operating leverage, and the pace of balance-sheet repair. Loan growth is seen in the mid-single digits YoY, deposits growing at a similar or slightly higher pace, and net interest margins (NIMs) broadly stable with mild volatility.
YES Bank will declare its financial results for the quarter and nine months ended December 31, 2025, and subsequently hold a post-earnings conference call with analysts and investors at 2:45 pm on the same day.
The broad picture: steady NII, uneven profit recovery
Across brokerages, the consensus view is that YES Bank’s operating performance continues to improve incrementally but lags sector leaders. NII growth is expected to remain resilient despite pressure on loan yields and a competitive deposit environment, aided by balance-sheet stability and controlled funding costs. NIMs are largely seen as flat to marginally higher or lower on a sequential basis, depending on assumptions around rate cuts, CRR-related benefits, and deposit repricing.
Profitability remains the swing factor. While some analysts see a strong YoY rebound in PAT on the back of lower provisions and operating leverage, others expect earnings growth to remain muted, capped by modest loan growth and structurally low margins. Return ratios are widely expected to stay well below those of large private banks.
JM Financial: Earnings recovery continues, but upside cappedJM Financial expects YES Bank to post one of its strongest quarters in recent periods, but remains cautious on the stock, arguing that structural issues persist. The brokerage forecasts Q3FY26 net profit of Rs 7.75 billion, up 26.6% YoY and 18.4% QoQ, supported by improving NII, controlled credit costs, and operating leverage.
NII is estimated at Rs 24,864 million, reflecting an 11.8% YoY and 8.1% QoQ increase, while pre-provision operating profit is seen rising 30% YoY to Rs 14.0 bn. Loan growth is expected at 6.3% YoY to Rs 2.60 trillion, with deposits growing a healthier 10.6% YoY to Rs 3.07 trillion, keeping the CD ratio at about 84.9%.
Despite the near-term improvement, JM Financial highlights that NIMs remain structurally low at around 2.6%, and return ratios, RoA of 0.7% and RoE of 6.3%, trail peers. “The recent performance improvement is largely priced in,” the brokerage says, adding that limited scalability and low margins constrain re-rating potential.
Kotak Institutional Equities: Modest PAT growth, improving asset quality
Kotak Institutional Equities projects a more subdued profit trajectory compared with JM Financial. The brokerage estimates Q3FY26 NII at Rs 24,254 million, up 9% YoY and 5.4% QoQ, with PAT rising just 2% YoY to Rs 6,015 million, though up 8.1% sequentially.
Net advances are seen at Rs 2,575 billion, up 5.2% YoY, and deposits at Rs 2,925 billion, up 5.5% YoY. NIM is calculated at 2.9%, up 12 bps YoY, reflecting some benefit from repricing. Asset quality is expected to improve, with slippages declining to 1.9% and credit costs at about 0.70%.
Kotak estimates RoA at 1.2% and RoE at 5.4% for the quarter, reinforcing the view that while balance-sheet metrics are stabilising, profitability remains modest.
Emkay Research: Growth lags peers, stance stays cautious
Emkay Research continues to view YES Bank as a laggard among private lenders, citing weaker growth, lower profitability, and inferior return ratios compared with peers. The brokerage does not count YES Bank among its preferred picks for either growth or recovery plays in the banking sector.
In its provisional Q3FY26 business update analysis, Emkay notes that YES Bank “disappointed” on loan growth, underperforming most private and PSU banks. Net advances stood at Rs 2,575 billion, up 5.2% YoY and 2.9% QoQ, which Emkay terms “modest and underwhelming.” Deposits rose 5.5% YoY to Rs 2,925 bn but declined 1.3% sequentially, a negative signal for deposit mobilisation, with the loan-to-deposit ratio remaining elevated.
On margins, Emkay expects NIMs to be “stable-to-slightly lower,” noting limited benefit from CRR cuts and rate tailwinds relative to stronger peers. Asset quality is seen improving gradually, supported by ARC-related recoveries and moderating slippages, but Emkay stresses that this is “incremental, not transformational.”
Profit growth, according to Emkay, is expected to remain muted. With FY26E RoA of about 0.8% and RoE of roughly 6.7%, the brokerage believes valuations, around 1.5x FY26E P/ABV, are not attractive enough to warrant a re-rating.
IIFL: Growth below consensus, CASA resilience a positive
IIFL does not provide explicit Q3 earnings estimates for YES Bank, which it lists as a non-covered private lender, but flags the bank’s growth metrics as lagging consensus expectations. Loan growth for Q3FY26 stood below estimates and deposit growth was described as weak, in line with or below most peers.
That said, IIFL notes that YES Bank was among the few banks where the CASA ratio did not deteriorate sequentially, pointing to relative stability in low-cost deposits amid aggressive savings rate cuts across the sector. Loan growth is pegged at around 10% YoY and deposit growth at about 7% YoY in its peer comparison tables, placing the bank mid-pack.
Valuation metrics cited by IIFL show YES Bank trading at about 1.41x FY26 P/B, with ROA in the 0.8–1.2% range and RoE between 6.3% and 9.9% over FY26–FY28, underscoring modest return expectations.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
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