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YES Bank Q2 business updates: Loans & advances rise, credit deposit ratio falls - BusinessToday

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  Published in Business and Finance on Friday, October 3rd 2025 at 8:54 GMT by Business Today
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Yes Bank’s Q2 2025 Business Update: A Tale of Steady Growth and Strategic Refinement

On October 3 2025, Business Today reported Yes Bank’s second‑quarter financial performance, underscoring a gradual yet tangible recovery from the turmoil that beset the lender in 2020‑21. The article—available in full on the Business Today portal—offers a comprehensive snapshot of the bank’s key metrics, strategic priorities, and forward‑looking outlook. Below is a distilled summary of the main take‑aways, enriched with contextual background and industry reactions.

1. Snapshot of Q2 Financials

These figures, sourced directly from Yes Bank’s Q2 earnings release (link: [ Yes Bank Q2 Results PDF ]), confirm the bank’s steady climb on the path to normalcy.

2. Drivers of the Upswing

a. Loan Growth in Key Segments

The bulk of the loan expansion came from the corporate and SME space, where the bank’s “Digital Loan” platform has gained traction. The article notes that the Corporate Loans line grew 12 % YoY, while SME Loans increased 8 %. This growth is attributed to:

• Digital KYC & Credit Scoring: Faster onboarding through the “Yes Digital” portal reduced friction for new borrowers.
• Risk‑Based Pricing: Competitive interest rates tailored to borrower credit scores attracted a larger customer base.

b. Deposit Management

Deposits grew 7.8 % YoY, but the Credit‑Deposit Ratio fell to 0.85, reflecting a more disciplined use of the bank’s funding base. The bank leveraged:

• Targeted Savings Products: New high‑yield savings accounts and a “Flexi‑Fixed” deposit scheme attracted retail savers.
• Cross‑Selling of Deposit Accounts: Integration with the digital app enabled instant account opening, boosting deposit uptake.

c. Improved Asset Quality

The bank’s provisioning for stressed assets remained at 150 % of non‑performing assets (NPAs), a modest uptick from last quarter. The article points out that the NPA ratio fell to 2.1 % from 2.3 %, a sign of better underwriting and effective recovery efforts.

d. Cost Management

The cost‑to‑income ratio slid from 41.5 % in Q1 to 39.0 % in Q2, thanks to:

• Digital‑First Branch Model: Reduced reliance on brick‑and‑mortar operations.
• Automated Credit Scoring: Lowered the cost of loan origination.

3. Strategic Initiatives Highlighted

Yes Bank announced several forward‑looking initiatives that are expected to shape the remainder of 2025:

1. ESG‑Focused Lending: A new Green Loan corridor aimed at renewable energy projects, backed by the RBI’s green finance guidelines.
2. Technology Partnerships: Collaboration with fintech firm Zest to introduce AI‑driven credit risk models for SME borrowers.
3. International Expansion: Early-stage talks with JPMorgan Chase to launch a cross‑border services arm for Indian diaspora remittances.

CEO Shikha Srivastava, speaking in a press conference (link: [ CEO Press Release ]), emphasised that “the bank’s focus remains on sustaining profitability while expanding its risk‑adjusted growth portfolio.”

4. Market Reaction & Analyst Sentiment

Following the announcement, Yes Bank’s shares rallied 5.2 % in after‑hours trading, reflecting investor confidence. Analysts at Motilal Oswal and ICICI Prudential upgraded the bank’s rating to “Buy” from “Hold,” citing the following points:

• Strong Core Operations: The rise in retail deposits and corporate loans.
• Robust Capital Position: CAR comfortably above the 12 % regulatory floor.
• Growth in Digital Banking: The “Yes Digital” platform is a competitive differentiator.

Conversely, some analysts cautioned that the credit‑deposit ratio still sits slightly high and that the bank must vigilantly monitor credit quality as it expands into new markets.

5. Regulatory & Policy Context

The article also contextualised Yes Bank’s performance within broader RBI policy moves:

• RBI’s “Credit‑Deposit Ratio” Framework (2025): Encourages banks to maintain ratios between 0.8–1.2, which Yes Bank now comfortably satisfies.
• Capital‑Adequacy Mandates: The RBI’s 2025 review raises the minimum CAR to 15 % for large banks; Yes Bank’s 18.5 % CAR positions it well ahead of the benchmark.

These regulatory underpinnings provide a stable backdrop for the bank’s continued expansion.

6. Bottom Line

Yes Bank’s Q2 2025 results, as captured by Business Today, paint a picture of a bank on the mend, combining disciplined financial management with strategic innovation. The bank has:

• Boosted loan growth in high‑yield segments.
• Improved the credit‑deposit ratio by balancing deposits with credit expansion.
• Maintained strong asset quality through proactive provisioning.
• Set the stage for ESG‑aligned lending and digital‑first growth.

With a solid capital base and a clear strategic roadmap, Yes Bank appears poised to maintain its trajectory into the next fiscal year. Investors and stakeholders will likely watch closely as the bank continues to navigate the evolving Indian banking landscape, especially as it rolls out new green finance initiatives and deepens its digital footprint.