Yes Bank & Federal Bank Q2 Results Diverge: A Mixed Bag for Investors
The second quarter of fiscal year 2026 presents a contrasting performance for two prominent private sector banks. YES Bank showcases a notable surge in net profit, while Federal Bank experiences a decline, albeit with record-high net interest income (NII).
YES Bank reported an 18.3% year-on-year (YoY) increase in its standalone net profit, reaching ₹654.47 crore for the quarter ended September 30, 2025. This is a significant jump from ₹553.04 crore in the same period last year. The increase in profit was supported by higher other income and lower interest expenses. The bank's net interest income (NII) also saw growth, rising by 4.5% to ₹2,300.88 crore, compared to ₹2,200.44 crore in the corresponding quarter of the previous year. However, on a sequential basis, the bank's net profit declined 18.3% from ₹801.06 crore as on June 30, 2025.
The asset quality of YES Bank remained broadly stable during the quarter. Gross non-performing assets (GNPA) rose marginally to ₹4,055.31 crore from ₹4,022.14 crore, QoQ. Net NPA declined to ₹770.8 crore from ₹797.3 crore, QoQ. The Gross NPA ratio remained flat sequentially at 1.6%, while the net NPA ratio also remained flat at 0.3%.
Total deposits at the end of September 30, 2025, reached ₹2,96,276 crore, reflecting a growth of 6.9% YoY and 7.4% quarter-on-quarter (QoQ), with continued outperformance in CASA. Net Advances of the bank registered growth of 6.4% YoY and 3.8% QoQ to ₹2,50,212 crore.
In contrast, Federal Bank reported a 9.6% YoY decline in its standalone net profit, which stood at ₹955.26 crore for the July-September quarter. This is compared to ₹1,056.69 crore in the same period last year. Despite the drop in net profit, the bank reported its highest ever net interest income (NII) at ₹2,495 crore. Sequentially, the bank's net profit rose 10.85%.
Federal Bank's total income jumped over 3.5% YoY to ₹7,824.3 crore. The bank also reported its highest-ever fee income at ₹886 crore. Total deposits expanded 7.36% YoY, while net advances grew 6.23% YoY. Asset quality remained strong, with GNPA at 1.83% and NNPA at 0.48%. The CASA ratio rose to 31.01%, marking a 94 bps year-on-year increase, as CASA deposits grew 10.71% YoY to reach Rs 89,591 crore. The Net Interest Margin (NIM) improved by 12 bps QoQ to 3.06%.
The contrasting results highlight the different strategies and challenges faced by the two banks. YES Bank's focus on improving asset quality and increasing non-core income has paid off, while Federal Bank's higher provisioning expenses have impacted its bottom line. However, Federal Bank's record-high NII and fee income demonstrate its operational strengths and financial stability.
