Mumbai: Backed by Japan’s Sumitomo Mitsui Banking Corporation (SMBC), Yes Bank has ample headroom to expand its balance sheet, as it focuses on improving operational efficiencies, new managing director and chief executive officer Vinay Tonse said on Saturday.
“Over the next three years, we will be looking at being a high-quality, consistently profitable franchise, with of course best-in-class asset quality, strong retail granularity, which has been spoken about and which we have already seen, and eventually sustainable return ratios,” Tonse said at the bank’s earnings call for March quarter (Q4FY26), addressing the media for the first time since taking over on 6 April.
Going ahead, he also expects growth to be supported by the bank’s technology platform, leadership in the digital payments ecosystem, and embedded banking capabilities.
“We will build on what is working well, strengthen areas that require more attention, and pursue growth that is thoughtful, calibrated, and sustainable,” Tonse said, adding that the bank will continue to invest steadily across key areas such as products, processes, technology platforms and customer experience. “In addition, our ongoing collaboration with SMBC provides helpful strategic support, particularly in corporate and cross-border banking.”
Japan’s SMBC acquired a 24.2% stake in Yes Bank in September 2025, becoming the largest shareholder in the private sector lender.
The mid-sized bank posted a net profit of ₹1,068 crore for the March quarter, up 44.7% on year. Net interest income was 15.9% higher at ₹2,638 crore, whereas the net interest margin (NIM) improved 10 basis points sequentially and 20 bps on year to 2.7%.
The margin improvement was driven by the repricing of deposits, strong transactions in low-cost current account and savings account (CASA) deposits, and a reduction in high-cost borrowings, chief financial officer Niranjan Banodkar said.
Executive director Rajan Pental said that the rundown of the high-cost Rural Infrastructure Development Fund (RIDF) is also helping margins. Combined with the steps taken to reduce the cost of deposits to below 5.5% as of 31 March, the bank expects NIM to keep improving by 15-20 bps annually and anchor around 3.25-3.50% over the next two-three years.
Total deposits of the bank crossed the ₹3 trillion milestone, touching ₹3.2 trillion as at the end of March, registering a growth of 12% on year and 9% on quarter. CASA deposits grew 15% on year to ₹1.1 trillion, accounting for 35.1% of total deposits.
Advances of the bank were up 11.1% on year and 6.2% on quarter at ₹2.7 trillion as of 31 March, 2026, led by a 20% growth in corporate and institutional banking loans, 14.5% in commercial banking advances and 4.7% rise in retail loans.
“Our momentum of growth in advances has picked up. What has been more important is it is actually quite secular across wholesale and retail,” Banodkar said in the earnings call, adding that retail disbursements are growing “quite well”.
“The observation that we have clearly is we now have a wider opportunity set (with SMBC coming in), which was in some ways constrained earlier. That gives us the ability to play a dual role of growing, building scale, and yet being profitable,” he said, adding that the bank will now look to consistently deliver “double-digit growth” like it did as of March 2026.
Gross non-performing assets (NPA) ratio of the bank improved by 30 bps on year and 20 bps on quarter to 1.3% whereas the net NPA ratio improved by 10 bps both sequentially and annually to 0.2%. These were the best asset quality numbers reported by the bank in the last 24 quarters, Tonse said.