SMBC-backed Yes Bank poised for balance sheet expansion: MD Tonse
Mumbai: Yes Bank, backed by Japan’s Sumitomo Mitsui Banking Corporation (SMBC), has ample room to expand its balance sheet as it focuses on improving operational efficiency, new managing director and chief executive Vinay Tonse said on Saturday.
Addressing the media for the first time since the bank’s takeover on April 6 for the March quarter (Q4FY26), Tonse said, “Over the next three years, we will of course be looking at being a high-quality, consistently profitable franchise with best-in-class asset quality, the strong level of retail granularity that has been talked about and that we have already seen, and ultimately sustainable rates of return.”
He also expects growth to be fueled by the bank’s technology platform, leadership in the digital payments ecosystem and established banking capabilities.
“We will build on what is working well, strengthen areas that require further attention, and pursue thoughtful, calibrated and sustainable growth,” Tonse said, adding that the bank will continue to steadily invest in key areas such as products, processes, technology platforms and customer experience. “In addition, our ongoing collaboration with SMBC provides useful 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 private sector lender’s largest shareholder.
Medium-sized bank announced net profit ₹1,068 crore in the March quarter, up 44.7% year-on-year. Net interest income increased by 15.9% ₹2,638 crore, while net interest margin (NIM) increased by 10 basis points sequentially and 20 basis points annually to 2.7%.
Finance chief Niranjan Banodkar said the improvement in margin was due to repricing of deposits, strong transactions in low-cost current and savings account (CASA) deposits and reduction in high-cost borrowings.
Executive Director Rajan Pental said the reduction in the costly Rural Infrastructure Development Fund (RIDF) had also helped margins. With steps taken to reduce the cost of deposits to below 5.5% as of March 31, the bank expects NIM to continue improving by 15-20 basis points annually and stabilize around 3.25-3.50% in the next two-three years.
The bank’s total deposits exceeded its limit ₹3 trillion milestone is touching ₹3.2 trillion as of the end of March, recording a growth of 12% on an annual basis and 9% on a quarterly basis. CASA deposits increased by 15% annually ₹1.1 trillion, accounting for 35.1% of total deposits.
The bank’s advances increased by 11.1% on an annual basis and 6.2% on a quarterly basis ₹It reached 2.7 trillion as of March 31, 2026, with an increase of 20% in corporate and institutional banking loans, 14.5% in commercial banking advances and 4.7% in personal loans.
“Our growth momentum in advances has picked up. What’s more important is that it’s actually been pretty stable across wholesale and retail,” Banodkar said in the earnings call, adding that retail payments are growing “pretty well.”
“The observation that we clearly have is that we now have a broader opportunity set (with the arrival of SMBC) and that was previously constrained in some ways. This gives us the ability to play a dual role of growing, building scale and still being profitable,” he said, adding that the bank will now look to consistently deliver “double-digit growth” as it is by March 2026.
The bank’s gross non-performing assets (NPA) ratio increased by 30 basis points annually and 20 basis points quarterly to 1.3%, while its net NPL ratio increased by 10 basis points both sequentially and annually to 0.2%. These are the best asset quality figures the bank has reported in the last 24 quarters, Tonse said.
