YESBANK.NS Stock Today: February 23 — CFO Guides FY26 ROA to 1%
YES Bank ROA FY26 guidance moved into focus as management signalled a 1% exit ROA by FY26. Q3 FY26 net profit rose 55% year on year to ₹952 crore, helped by PSL compliance and capital support. The YESBANK.NS stock closed at ₹20.80 on 20 February. Investors are tracking the RIDF reduction strategy that shifts low‑yield balances into higher‑yield assets. If margins hold and credit costs stay low, the YES Bank 1% ROA target could improve sentiment in India’s private banking space.
Q3 results and FY26 profitability path
Q3 profit rose 55% year on year to ₹952 crore, reflecting better recoveries, fee momentum, and lower drag from priority sector shortfalls. Management reiterated confidence in profitability gains as operating metrics stabilise. Capital and governance support also helped execution. These factors sit behind the YES Bank ROA FY26 outlook, which aims to lift returns closer to the private bank pack. source
An exit ROA of 1% implies the bank targets that run-rate by the end of FY26, not necessarily the full-year average. The gap from today’s TTM ROA of about 0.74% needs steady margin gains, fee growth, and controlled credit costs. Management’s plan links to mix changes and compliance gains, which together drive the YES Bank ROA FY26 pathway. source
RIDF redeployment and margin levers
The RIDF reduction strategy aims to move funds parked at low returns into retail and MSME assets with better yields. As PSL compliance improves, RIDF balances can fall, freeing cash to support net interest margin. This change, if executed with tight underwriting, is central to the YES Bank 1% ROA target and the broader YES Bank ROA FY26 plan.
Hitting 1% ROA needs a few levers to work together. A modest NIM lift from asset mix, steady low credit costs, and higher fee income from cards, payments, and trade are key. Operating cost control, branch productivity, and digital origination can add support. Together, these can compound to bridge today’s 0.74% ROA to the YES Bank ROA FY26 goal.
Deposit competition could cap NIM if term rates stay high. A slower shift from RIDF or weaker loan demand would also weigh on yields. Any uptick in stress from unsecured or SME books can raise credit costs. These risks mean execution discipline is essential to protect the YES Bank ROA FY26 trajectory.
Capital, ownership, and asset quality
The SMBC stake in YES Bank stands at 24.9%, which supports confidence and aids long-term partnerships. Capital strength helps fund growth and absorb shocks while the bank refines loan mix. This backing, paired with better compliance, aligns with the YES Bank 1% ROA target and can improve funding access if growth accelerates and asset quality remains stable.
Improved recoveries have supported profits, while fees from retail and transaction banking add non-interest income. Cost focus through digital channels can improve operating leverage as volumes rise. These steady improvements, though incremental, are important to the YES Bank ROA FY26 plan and can help offset any near-term pressure from funding costs.
A 1% ROA would still trail top private peers that typically run near 1.5% to 2%. A sustained climb in ROA, consistent fee growth, and stable asset quality are more likely to drive a valuation re-rating. Clear evidence on RIDF exit pace and NIM durability will be key checkpoints for the YES Bank ROA FY26 thesis.
Stock check: price, valuation, and technicals
At the 20 February close, the stock traded at ₹20.80 with a market cap near ₹66,022 crore, PE 21.0, and PB 1.31. Book value per share is ₹16.01. TTM ROA is about 0.74% and ROE 6.6%. Progress toward the YES Bank ROA FY26 target, if visible in quarterly trends, could support multiples.
Momentum is soft with RSI at 42.8 and ADX at 16.7, indicating no strong trend. Bollinger bands sit near ₹21.64 upper and ₹20.80 lower, with the 50-DMA at ₹21.80 and 200-DMA at ₹21.20. A close above ₹21.80 may open upside, while ₹20.45 to ₹20.80 is initial support. Keep sizes disciplined.
The next results are scheduled on 16 April 2026. Watch NIM movement, RIDF balance reduction, deposit mix, fee growth, and credit costs. Any update on the SMBC stake in YES Bank and capital buffers will matter. Delivery on these could validate the YES Bank 1% ROA target and support a gradual re-rating.
Final Thoughts
YES Bank’s management is aiming for a 1% exit ROA by FY26. Q3 profit growth of 55% to ₹952 crore, better PSL compliance, and capital support form the base. The core driver is the RIDF reduction strategy that can lift margins by moving into higher-yield assets. To track progress, we should focus on NIM, fee momentum, stable credit costs, and operating efficiency. Technically, the stock sits near support with muted trend signals, so confirmation above the 50-DMA would help. For investors, a staggered approach makes sense while we wait for proof points in the next few quarters. This is informational, not investment advice.
FAQs
What does the YES Bank ROA FY26 guidance mean for investors?
Management aims to reach a 1% return on assets run-rate by the end of FY26. It signals improving profitability from margins, fees, and stable credit costs. It is not a guarantee. We should watch quarterly trends in NIM, RIDF reduction, and asset quality to judge if the plan stays on track.
How can the RIDF reduction strategy support margins?
As PSL compliance improves, low-yield RIDF balances can be lowered and redeployed into higher-yield retail and MSME loans. This lift in asset yields, combined with disciplined funding costs, can raise net interest margins. Execution quality and risk controls are vital, since a fast shift without underwriting discipline can add credit risk.
What is the impact of the SMBC stake in YES Bank?
SMBC holds 24.9% in the bank, which adds credibility and capital comfort. This backing can support growth funding, partnerships, and investor confidence. It does not replace the need for steady execution. Investors should still track margins, asset quality, and cost control to confirm the turnaround stays durable.
Is YESBANK.NS attractive at current valuation levels?
At ₹20.80, the stock trades near 21x TTM earnings and 1.31x book. If the YES Bank ROA FY26 goal is met with consistent NIM and low credit costs, upside may follow. If margins stall or stress rises, valuation could compress. A staggered entry with stop-loss discipline is prudent.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.