YES Bank Q2 FY26 Results Preview: What to Expect from Profit, NII, and Asset Quality Tomorrow

Market Gears Up for Key Earnings Report Amid Turnaround Focus

YES Bank is set to announce its much-awaited financial results for the second quarter of the Financial Year 2025-26 (Q2 FY26) on Saturday, October 18, 2025.

The market sentiment ahead of the announcement is one of cautious optimism. Investors and analysts are keen to see further evidence of the bank’s sustained turnaround, particularly in core operational efficiency and asset quality management. This earnings call will also be the first significant event following the major stake acquisition by Japanese financial conglomerate, Sumitomo Mitsui Banking Corporation (SMBC).

Key Financial Metrics: Analyst Consensus

Brokerage houses generally anticipate a strong Year-on-Year (YoY) profit growth, primarily due to the improving provisioning coverage and recoveries. However, a slight Quarter-on-Quarter (QoQ) moderation in profits is expected, largely attributed to lower treasury income compared to the previous quarter.

Metric	Consensus Estimate	Expected YoY Change	Key Driver
Net Profit (PAT)	₹640 cr to ₹799 cr	Up to 44 %	Recoveries from the ARC and contained credit costs.
Net Interest Income (NII)	₹2,295 cr to ₹2,350 cr	Up to 7%	Steady loan book expansion.
Net Interest Margin (NIM)	approx 2.4%	Broadly Stable	Higher cost of funds may cause a marginal sequential contraction.

Asset Quality and Recoveries (The Core Driver)

For YES Bank, the story continues to be anchored in its ability to clean up the balance sheet. A large part of the forecasted profit surge is non-core, stemming from exceptional provisioning strategy and recoveries.

Gross NPA (GNPA) and Net NPA (NNPA): These key metrics are expected to remain stable, with analysts projecting GNPA to hover around $\text{1.6\%}$ and NNPA around $\text{0.5\%}$.
Provisioning: The effectiveness of the bank’s efforts in recovering bad loans, particularly through the Asset Reconstruction Company (ARC), will be the single most important factor supporting the net profit figure this quarter. Contained slippages are vital for sustained profitability.

Growth in Loans and Deposits

Steady business expansion is crucial for shifting the growth narrative from ‘recovery’ to ‘normalisation.’

Loan Book Expansion: Analysts expect the bank’s advances to show robust momentum, with growth anticipated at approximately 7% YoY and 4% QoQ. This growth is primarily driven by stability in the Retail and MSME segments.
Deposit Mobilisation: Crucially, deposit growth is also expected to be strong, possibly outpacing credit growth, at around 7-8%. The continued mobilization of retail deposits is essential for improving the bank’s low-cost Current Account and Savings Account (CASA) ratio and ensuring funding stability.

The SMBC Factor and Future Outlook

The Q2 earnings call will provide the first opportunity for management to address investors following the substantial stake increase by Sumitomo Mitsui Banking Corporation (SMBC).

While the results reflect the period before the full strategic impact, investors will be listening closely for management commentary on:

Collaboration: Any planned strategic or operational synergies with SMBC.
Long-Term Guidance: Clarity on the bank’s revised long-term strategy, particularly regarding margin stability and the roadmap for reaching pre-crisis levels of operational metrics.

Investor Action: What to Watch on Saturday

Investors should pay close attention to the following specific data points in the results released tomorrow:

Quantum of Recoveries: The specific figure for recoveries and upgrades during the quarter.
Cost of Funds: Any commentary on the competitive deposit environment and its impact on Net Interest Margin (NIM) going forward.
Core Pre-Provision Operating Profit (PPOP): This metric reflects the bank’s operational profitability before provisioning, giving a clearer picture of its underlying business health.

The performance of the YES Bank stock on Monday will heavily depend on whether the reported numbers align with or exceed the street’s expectations, especially in the context of controlled asset quality.

Disclaimer: This article is based on market consensus and analyst expectations ahead of the official results announcement and should not be construed as investment advice. Investors are advised to consult a qualified financial advisor before making any investment decisions.