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YES Bank Targets 1% ROA by FY-End, Eyes Higher Profitability Next Fiscal

Written by: Nikitha DeviUpdated on: 23 Feb 2026, 5:06 pm IST
YES Bank expects to close FY with 1% ROA as profitability improves, supported by RIDF reduction and SMBC’s strategic backing.
YES Bank
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Private sector lender YES Bank expects to exit the current financial year with a return on assets (ROA) of 1%, according to its Chief Financial Officer Niranjan Banodkar. 

He further indicated that on an annual basis, the bank’s ROA is projected to exceed 1% in the next fiscal year, signalling steady improvement in profitability.

ROA is a key profitability metric that measures how efficiently a bank uses its assets to generate earnings. A higher ROA reflects better asset utilisation and stronger bottom-line performance.

Strong Quarterly Performance

For the December quarter, YES Bank reported a net profit of ₹952 crore, marking a 55% year-on-year growth and a 45% increase on a sequential basis. The annualised ROA for the quarter improved to 0.9%, compared to 0.6% in both the previous quarter and the corresponding quarter last year.

For the nine-month period, the annualised ROA rose to 0.8%, up from 0.5% in the same period of the previous financial year, highlighting consistent financial recovery.

SMBC Stake and Strategic Direction

Last year, Sumitomo Mitsui Banking Corporation (SMBC) acquired a 24.9% stake in YES Bank for approximately ₹16,000 crore. Following the investment, SMBC nominated Shinichiro Nishino and Rajeev V Kannan as Non-Executive Non-Independent Directors on the bank’s board.

Banodkar stated that the bank aims to anchor growth around 15%, while balancing expansion and profitability improvement, especially with strategic support from SMBC.

Focus on RIDF and PSL Compliance

A critical driver of improved profitability has been the resolution of legacy priority sector lending (PSL) shortfalls. Since FY24, the bank has maintained 100% compliance across all PSL subcategories, preventing additional burdens on the Rural Infrastructure Development Fund (RIDF).

RIDF balances have declined from a peak of about 11% in FY24 to 6.9% in the third quarter, with a target to reduce them below 5% of total assets by FY27. As these low-yield assets mature, the bank plans to retire high-cost borrowings and redeploy funds into higher-yielding advances.

Yes Bank Share Price Performance

On February 23, 2026, Yes Bank share price (NSE: YESBANK) opened at ₹21.06, touching the day’s low at ₹20.86, as of 11:25 AM on the NSE.

Also ReadYes Bank Share Price in Focus as RBI Approves Vinay Tonse as MD and CEO for 3 Years!

Conclusion

YES Bank’s improving ROA, disciplined balance sheet management, and strategic backing from SMBC reflect its steady recovery trajectory. With a focus on profitability, asset quality, and calibrated growth, the bank appears well-positioned to strengthen its financial performance in the coming fiscal year.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a private recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Published on: Feb 23, 2026, 11:35 AM IST

Nikitha Devi

Nikitha is a content creator with 7+ years of experience in the financial domain. Specialising in personal finance, investments, and market insights, Nikitha simplifies complex financial topics, making them accessible to readers.

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