AI-generated · cited to primary sources · not investment advice · How we research
Yes Bank
Our verdict on Yes Bank isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
The bank has already surpassed the 70% PCR target when including technical write-offs, reaching 80.1%. (5 exceeded across 5 tracked commitments)
“The redemption that will come through in Fiscal ‘25, we will make sure that, that balance becomes zero by the end of Fiscal ‘25, right. That is the first priority.”
The bank surpassed its recovery target for the fiscal year, achieving nearly INR 6,000 crores. (3 exceeded, 2 met across 5 tracked commitments)
“we are quite confident that FY ‘25 also we will see a similar trend, but definitely more than INR 5,000 crores.”
See the full cited Management analysis of Yes Bank
How durable is the business?
Non-interest income as a percentage of average assets has meaningfully increased from 1.1% in FY23 to 1.4% in FY25, driven by granular fee income streams. (5 expanding across 1 engine)
“Non Interest Income Q3FY26 1,633; Y-o-Y 8.0%; Total Income 4,098”
The bank's ownership structure is shifting from a rescue-led consortium to a strategic global partnership with Sumitomo Mitsui Banking Corporation (SMBC) acquiring a 20% stake. This transition from the 2020 Reconstruction Scheme to a long-term strategic investor is expected to drive the next phase of profitability and value creation. (1 expanding)
“SMBC to acquire 20% stake from SBI and other Investor Banks; SMBC to become Bank’s largest shareholder... The transaction is a significant milestone to drive YES Bank’s next phase of growth, profitability and value creation, leveraging SMBC’s global expertise”
See the full cited Business Model analysis of Yes Bank
Where does growth come from?
Credit card spending is accelerating sharply, with Q4FY24 showing the highest ever spends for the bank. (5 accelerating across 5 signals, 1 leading indicator)
“Entered into a Strategic Bancassurance Partnership with LIC to offer life insurance solutions across YES BANK’s network and digital platforms.”
Capital levels saw a significant boost this quarter due to warrant exercises by major private equity investors, providing a strong runway for growth. (5 accelerating across 5 signals, 2 leading indicators)
“Spends in Cr... 11,705... 26.2% Y-o-Y”
See the full cited Future Growth analysis of Yes Bank
What could break the thesis?
NIM is showing signs of stabilization and sequential improvement, rising to 2.5% in Q4 from a full-year average of 2.4%, supported by a rising CASA ratio of 34.3%. (5 easing, 1 high-severity)
“Lower CASA + Higher Borrowing mix impact... Net Int. Income 2.4% [FY23] to 2.2% [9MFY26]”
The risk is easing as the balance of mandated low-yield deposits has reduced from a peak of INR 44,087 Crs (10.9% of assets) in FY24 to INR 29,225 Crs (6.9% of assets) in Q3FY26. Management expects this to drop below 5% over the next 2 years. (2 easing, 1 high-severity)
“Mandated deposits in lieu of PSL Shortfalls: At 6.9% of Assets a drag on income & profitability”
See the full cited Risk analysis of Yes Bank
Read the full thesis on Yes Bank
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