Ladies and gentlemen, good day and welcome to Yes Bank's Q4 FY 2026 Results Conference Call. On the management panel we have with us today Mr. Vinay M. Tonse, Managing Director and Chief Executive Officer, Yes Bank; Dr. Rajan Pental, Executive Director; Mr. Manish Jain, Executive Director; Mr. Niranjan Banodkar, Chief Financial Officer; and Mr. Sunil Parnami, Head of Investor Relations and Sustainability. Mr. Vinay M. Tonse will now give you an overview of the results, which will be followed by a Q&A session. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded.
Participants are requested to ask questions pertaining to the bank's Q4 FY 2026 results only. For any other information, you may reach out to the corporate communications team separately. I now hand the conference over to Mr. Vinay M. Tonse. Thank you, and over to you, sir.
Yeah. Thank you very much. At the outset, our apologies for getting into this meeting a little late. We got stuck in some other meetings today. Sincere apologies for that. Formally to start, good afternoon, everyone, and thank you for joining us for the Yes Bank Q4 and full year FY 2026 earnings conference call. While I have interacted with many of you in my earlier role, this is my first earnings interaction as the MD & CEO of Yes Bank, and I'm very pleased to join you today along with my senior leadership team, and I also look forward to building a long-term engagement with all of you. As part of my opening remarks, I will briefly cover my first impressions of the bank, our take on the current operating environment, and key highlights of our quarter four as well as the full year FY 2026.
At the outset, I would like to express my sincere appreciation for Mr. Prashant Kumar, my predecessor. Over the past several years, he led Yes Bank through a multi-year and truly unique transformation. His leadership was pivotal in stabilizing, strengthening, and also reanchoring the institution. I must also bring in here mention of the strong support of the Government of India, the Reserve Bank of India, and the State Bank and other banks who got in together to bring in the reconstruction of the Yes Bank. Also, last but not the least, the board of directors, which guided us during this period, and also our customers and employees who were a huge source of strength for us. Thanks to these collective efforts, the bank I now have the responsibility to lead stands on a very stable foundation.
Even in challenging periods, the Yes Bank brand remained relevant, and trust was rebuilt gradually through steady execution. Today, the bank operates on a stronger base with resilient asset quality, a more granular franchise, a strengthened deposit engine, and renewed stakeholder confidence supported by strong shareholders such as SMBC, SBI, and Advent International. Over the last few weeks, I have spent meaningful time across teams and functions, listening, understanding, and also observing the nuances of how this bank operates. My early interactions have highlighted the steady commitment of the Yes bankers, who have been supportive through challenging periods and contributed to restoring confidence. I've also seen a strong alignment of purpose across all the stakeholders. That's amongst employees, customers, regulators, the board, and investors, which is very reassuring for the path ahead for us.
Alongside this, our modern technology platform, the leadership in digital payments ecosystem we have, and collaborative embedded banking capabilities provide useful strengths as we enter the next phase of growth. Going forward, we will build on what is working well, strengthen areas that require more attention, and pursue growth that is thoughtful, calibrated, and also sustainable. Execution, discipline, and stakeholder trust will remain central to how we operate. Looking ahead, we will continue to invest steadily across four basic areas. Our people, our product, our processes, and technology platforms. These remain important to strengthening the bank over time. We will also keep building on the power of one Yes Bank to ensure a consistent customer experience across businesses. In addition, our ongoing collaboration with SMBC provides helpful strategic support, particularly in corporate and cross-border banking. Now let me talk about the macros as they are evolving.
We are closely observing the fast-evolving global environment, including the AI landscape and the geopolitical conflicts impacting global growth, supply chains, energy and freight costs, and also the inflation and interest rate trajectories. Against this backdrop, India remains comparatively resilient, supported by steady domestic demand and a stable financial system. As a bank, we remain attentive to these trends and their potential implications for our businesses. To the third part now. I will now share some of the key highlights of our quarter four and also the full year FY 2026 performance. Despite the ever-evolving macro environment, the bank closed FY 2026 with stable and improving financial performance, underscoring our progress on profitability, productivity, and balance sheet quality. For the full year FY 2026, net profit stood at INR 3,476 crore, up 44.5% over FY 2025.
The net profit of INR 2,406 crore supported by continued improvement in our operating performance, and ROA for the full year was at 0.8% versus 0.6% in FY 2025. Number two, for the quarter four, the bank reported a net profit of INR 1,068 crore, reflecting a strong growth of 44.7% net profit over the net profit of INR 738 crore in the corresponding quarter of the previous year. In line with our guidance, the bank reports a ROA for the quarter of 1%. Number three, talking of our net interest income and NIM, NII for the quarter was INR 2,638 crore, which was up 15.9% YoY. Despite adverse interest rate environment and elevated competitive intensity in deposits, our NIM saw an improvement of 10 basis points quarter-on-quarter and 20 basis points year-on-year and came in at a number of 2.7%.
Even for the full year, the NIM at 2.6% improved 20 basis points vis-à-vis FY 2025 and in line with our guidance given in Q4 of FY 2025. Our margin improvement was supported by multiple factors, namely, frontloading of our deposit repricing that happened last April, continued outperformance in CASA, and sustained reduction in high cost borrowings, mirroring continued rundown of the RIDF and PSL related mandated deposits. Net interest income for FY 2026 at INR 9,776 crore grew 9.3% year-over-year. In line with our guidance, in FY 2026, the bank had a second straight year of 100% compliance in PSL and all of its subcategories, which resulted in notable reduction of RIDF and other mandated deposits to 6% of total assets vis-à-vis 9% as at the end of FY 2025. That was 6% now against 9% last year.
The bank continues to see a gradual increase in its organic accretion of PSL across subcategories. Going forward, the bank remains well on track to reduce these deposit balances to below 5% by fiscal 2027, which will aid our margin and profitability. As regards the non-interest income, the bank saw continued momentum across all diverse and granular fee income streams. Non-interest income for the FY 2026 at INR 6,759 crore grew 15.4% year-over-year, driven by healthy traction in Retail fees, SME and Commercial Banking fees, and also on the back of a strong transaction banking performance. We continue to strengthen our fee momentum by deepening client engagement, improving the cross-sell intensity in Wholesale Banking, and scaling our digital fee engines. This includes driving higher penetration of ForEx, trade, and CMS flows within our corporate relationships while broadening Retail fee contributions through pre-approved programs, cards, payments, and wealth offerings.
Over the last three years, the bank has seen a meaningful increase in its non-interest income to average assets ratio, which has increased from 1.1% in FY 2023 to 1.5% this year, FY 2026. Cost to income ratio for FY 2026 also saw a big improvement to 66.7% versus 71.3% in FY 2025. That's 66.7% now versus 71.3% last year. The exit for the financial year came in even lower, with the cost to income ratio coming at 63% vis-à-vis 66.1% Q3 FY 2026 and 67.3% the same quarter last year. The decline has been in line with our broad guidance to gradually keep bringing down our cost to income ratio, and we expect the momentum to continue. Improving core profitability remains a central theme for us. For FY 2026, the bank had a PPOP, pre-provisioning operating profit, of INR 5,506 crore, which grew 29.4% year-on-year.
FY 2026 PPOP as a percentage of average total assets improved to 1.2% versus 1% for FY 2025 and 0.9% in FY 2024. The PPOP for the quarter was INR 1,618 crore, up 23.1% year-over-year, supported by income growth outpacing expenses growth, reflecting sustained expansion in our operating jaws. Asset quality remained strong during the quarter. As at 26th March 2024, the bank reported gross NPA and net NPA of 1.3% and 0.2% respectively, the lowest ever that we have seen in the last 24 quarters and amongst the top quartile in our peer set. Sequentially, the GNPA and NNPA ratio improved by 20 and 10 basis points respectively. Further, the provision coverage ratio, the PCR, continues to remain healthy at 81.9%. The resolution momentum remains strong.
The bank had total recoveries and upgrades of INR 4,795 crore in FY 2026, which included recoveries from security receipts of a little more than INR 1,550 crores against our guidance of INR 1,200 crore. In line with the rundown in the face value of the security receipts, we expect recoveries to the tune of INR 800-INR 1,000 crore from SRs in FY 2027. The bank continues to reduce its overdue exposures, strengthen early warning mechanisms, and enhance the underwriting standards and the collection infrastructure. Gross slippage ratio in FY 2026 has improved to 1.8% versus 2.1% last year. This has been led by improvement in the retail asset slippages, which improved in FY 2026 to 3.5% from 4% in FY 2025, with the exit rate even lower at 2.8% this quarter four versus 3.4% the last quarter.
Retail slippage for Q4 at INR 888 crore is at its lowest in the past nine quarters, with improvements visible across both secured and unsecured products. Together, these trends underscore the resilience of our asset book and the effectiveness of our ongoing credit risk management efforts. Overall credit costs remained low at 0.2% for the full year FY 2026 versus 0.3% last year. Credit costs for Q4 was at 0.17%. Now moving over to the balance sheet highlights. Growth saw a marked uptick during the quarter, aided by acceleration across business segments. Total advances registered a growth of 11.1% year-on-year to INR 273,000 crore. Retail disbursements in particular have gained significant momentum, registering 41% year-on-year growth in Q4 FY 2026. We remain focused on balanced and profitable growth across Retail, Commercial, and Wholesale businesses, supported by disciplined risk selection and effective pricing.
We crossed two critical milestones in our deposits franchise during this quarter. While overall deposits crossed the milestone of INR 3 lakh crore, the CASA balances crossed the milestone of INR 1 lakh crore. Total deposits increased 12.1% year-over-year to INR 318,000 crore, with a strong contribution from Retail and branch-led deposits, which grew 13.5% year-over-year and comprised 58.4% of the total deposits. CASA balances grew 14.9% year-over-year to INR 1.12 lakh crore, and even on a QoQ basis, the CASA growth was strong at 11.2%, and the CASA ratio also improved 80 basis points year-over-year and 110 basis points QoQ to 35.1%. Strengthening of the liability franchise remains a priority for the bank.
We are working to reduce reliance on the bulk savings bank balances, improving branch-led and digital-led acquisition funnels, enhancing customer journeys, and sharpening the pricing strategy, ensuring competitive positioning without compromising stability. Continued improvements in digital onboarding, the KYC processes, and RM productivity have enabled us to capture higher primary banking share from our target customer segments and are the key drivers of our continued outperformance to the industry in CASA. Our credit to deposit ratio, the CD ratio, improved to 85.7% from 88% in the Q3 FY 2026 and 86.5% in Q4 FY 2025. Our capital adequacy and liquidity levels remain comfortable to support the growth aspirations of the bank going forward. A few other updates from our side. I'm pleased to welcome on board Mr. S. Anantharaman as the Chief Risk Officer of the bank.
He's an industry veteran with over three decades of experience with rich expertise in the risk management domain. We also opened 82 new branches during the year, which was in line with our guidance at the start of the year. Our ESG ratings, which are already the best in the banking industry in India, continue to see improvement across agencies such as S&P, FTSE, and ISS ESG. Yes Bank also has been recognized as a great place to work for the fourth consecutive year. The bank has rolled out a new business offering in the form of YES Grandeur, which is the premium banking suite, developing and delivering business solutions, digital integration and operational benefits for modern enterprise.
To conclude, as we enter FY 2027 with stability and renewed momentum, we will be continuing to invest in our people, products, processes and technology, deepen customer relationships across segments, focus on building a future-ready bank with very strong resilience. Finally, I thank you once again for joining us today. We can now take questions. Thank you.
Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Jayant Kharote from Axis Capital. Please go ahead.
Hello, am I audible? Hi. Congratulations, sir, for a good set of results. The first question will be going ahead, given that, I know it's been a short stint so far, but how are you looking at growth in the bank for the next one year? Is there anything you're waiting for to accelerate in terms of any of the balancing metrics? Or you think we can start aiming for that 15%+ growth firstly on that. Second, of course, if you could help us with the average CASA growth in Q. Compared to the loan growth, maybe the CASA has ended up despite the rate cuts, but how do you sort of grow that in line, maybe in like 14%-15% on an average basis? How do you address that problem? These two questions.
Thanks. Jayant, hi. I'll start with the CASA growth on the average basis. On both CA and SA have sequentially grown in the range of about 4%. In fact, CA sequential growth has been slightly more than 4%, but blended is about 4%. If I actually look at term deposits growth, and I'm excluding the CDs that we ended up raising as well. The term deposits also have grown big picture at about 4%. If I were to characterize the growth for Q4 across the deposits, it's broadly anchored around a 4% CASA and TD. I think we're kind of maintaining the CASA ratio at least from an average performance vantage point, right? If I look at the year-on-year growth on CASA, that is anchored at around 11% growth rate on an average.
Again, we're talking about average Q4 2026 to average Q4 2025, so that's on deposits. You had a question which you started with was on next year's growth. We've kind of discussed this on earlier calls as well. We do believe that we are a franchise that indeed should be delivering growth in line with the industry, if not targeting more. There were reasons which were quite peculiar to us and conscious why we calibrated the growth lower. Quite happy to report that we've already seen between December and March that the momentum, the sequential momentum is beginning to quite accelerate. That's kind of ending up with a reported number of 11% on a year-over-year basis for advances growth. We do believe that that momentum should certainly continue, and not just in certain products or segments.
I think what we are now talking about is a lot more secular across segments. Of course, retail disbursement growth rates are quite aggressive. We're moving fast now, given that we now have confidence on the asset quality and profitability. Having said that, the book is slated to grow in double digits next year. Net-net, we put all of this together. We should certainly aim to grow in line with industry, if not more, and that broadly anchors around the 14%-15% range.
Thank you, sir. If I could just squeeze in one last question on the margin. This RIDF rundown has been quite healthy last year. Going into next year, should this trajectory on margin expansion continue QoQ or will we see this something similar back ended?
On a year-over-year basis, again, some of the rundowns that we had in RIDF this year also were more heavy from an H2 perspective. To that extent, FY 2027 comparison to FY 2026, even if it is year ended, should have no material bearing. There is a rundown plan, so we ended this year at about INR 27,900 crore, it's ballpark INR 28,000 crores. We think that next year, at the minimum, the reduction should be about INR 6,500 crores. That could also go as high as INR 9,000 crores by the end of March 2027.
Great. Thank you and once again, all the best for that.
Thank you. Thank you very much.
Thank you very much, Jayant. Thank you.
Thank you. Our next question comes from the line of Jai Mundhra from ICICI Securities. Please go ahead.
Yeah. Hi, good afternoon, everyone, and congratulations on a good quarter. Sir, our first question is on your growth mix. We have achieved 1% ROA. Asset quality seems to be holding up reasonably well. Retail slippages, while they're improving, they're still 2.93%. We see that retail advances are both up 4%-5% on both QoQ YoY basis. Given the SMBC induction as the largest shareholder, do you envisage any change in the loan mix between Retail, Wholesale, Commercial, as you move towards industry level growth? That is the question number one.
Jayant, on-
Jai. Thank you, Jai.
Sorry. I think we've got similar names. My apologies for that.
This is Jai.
Jai. No, of course. I know him well. Sorry about that. On the growth mix, I think important to note is the retail disbursement growth, because that's really an important control level that we have, which we are driving faster. If you look from a YoY perspective, in fact, we are kind of way above a 20% YoY growth. We do believe that it should ultimately get normalized in the 20%-25% range. What we are aiming to grow the retail book next year is actually should hit the double-digit growth, let's say about a 10%-11% is what we do believe it should deliver. If I look at the corporate book, that's already growing at about 20%. We do believe we have the levers to grow at 20%. Commercial banking is something that is a space we like.
historically has been a good growth driver for us, and that continues to also deliver about 18% growth. Net-net, I think the momentum is playing out as we're exiting FY 2026. It is quite secular across all segments, and that therefore gives us the confidence to start delivering a growth in line with industry, if not more. Now, maybe for about a year or so, because Retail is catching up, but they are still, maybe let's say, end up growing maybe 10%-11% next year. To that extent, there will be some mix, I would say, compression, but that's not going to be material. As we kind of move forward, I think we will anchor around a reasonably similar mix composition that we have right now.
Yeah, sure. That is very helpful. On the treasury, the bonds, the G-sec, had spiked in during the quarter. They ended at more than 7% at quarter end. Did you have any MTM on investment book or if you can specify, was there any MTM loss either in the P&L or in AFS results? Or was there any offset?
No, sure. Jai, take that. As a market philosophy, we don't run very high open risk through our trading book, whether it's bonds or for that matter, even FX. While you've not asked, I can also confirm that even the FX, because of some of the changes that came through regulation, it's not had any material bearing on our mark-to-market. Because as a philosophy, we don't run quite large trading positions on markets. However, yes, we do acknowledge that the yields did go up and that has had a bearing on our, let's say, the minimum SLR maintenance book, which is largely parked in the HTM. We do also note that the yields have come off from the reporting period of March, so we will wait and watch how the yields behave. That's largely in the HTM book.
There has been some P&L movement through the AFS reserve, but that's already fully baked into our CET1 computation for December, and you would see that our CET1 also continues to be healthy from a 13.9% yield. We just consumed about 10 basis points for the March report as well. No material impact from the yield increase. On the contrary, we do believe that this should help us add to some yields in our investment book from a margin perspective.
Right. No, if you have the number for AFS reserve, let's say Q3 and maybe the Q4, that will give some sense on what was the movement in the AFS reserves.
You're saying in terms of the absolute value?
Yes.
The AFS reserve, we have a negative balance of about INR 100 crore as of March 31st.
Okay. Do you have the number? Yeah.
Yeah, the swing would be about INR 200 crores.
Okay. Sure. You have mentioned that INR 340 crores of one-time standard assets provisioning as a step-up provisioning. If you can elaborate on that, is this against any specific exposure? Is this in the run up to ECL or any more color on that?
Sure, Jai. Important question. On that, before I get into that, just a couple of context setting that I wanted to do. One, if you see, we continue to have a very strong recovery from SRs this quarter, which was in the range of INR 450 crores. The second is we've also had one corporate asset that got resolved, which had slipped much earlier, which was provided for, and that also meant that we had a write back of about INR 288 crores during the quarter. Third, and which is very fundamental and more important, is our core NPA credit cost is also lower quite substantially quarter on quarter. These were the three material contributors to provisioning buffers that we have that gives us the ability to create. Second, what we do is we've usually followed quite conservative policies from a provisioning standpoint.
A great example is if you look at our NPA, we've kind of carried PCR in the range of 80%+ now for the last three quarters. We've always stated objective to be quite high from an NPA standpoint coverage. As part of that philosophy as well, we kind of look through portfolio and our own provisioning policies, and we did realize that there are sometimes evolving and possibly even prudent provisioning policies. That application we have done in Q4 of this year, which translates to about INR 341 crore. I want to be emphatically clear here that the provisioning that we've done on certain, let's say, product or segment, in no way reflect an underlying credit issue or an impairment or our view about that sector. It is just what we thought was prudent and just being proactive in terms of taking more provisioning.
Understood. Thanks, Niranjan. Sorry, I have two more question. I can ask them now or maybe I can. If you allow, I can just take them now also.
Okay. Sure.
Yeah, sure.
There you go.
Yeah. Sir, on ROA trajectory, now we have achieved 1% ROA adjusted for labor code last quarter and this quarter, maybe more than 1% if I adjust this INR 340 crore contingent provisioning. What is the next milestone? As you had hinted that growth you would aim at similar to system. How would you look at ROA trajectory? Because NIM seems to be having some tailwinds and asset quality, you anyway have reasonably good tailwind. What would be your next stop? Maybe exit FY 2027 or maybe full year FY 2027, if you can provide some color there. Thank you.
It's again, something that we've been saying we will want to exit FY 2026 with a 1% ROA, and as you rightly pointed out, I think, we are now beginning to deliver that more consistently, December also being 1% adjusted for the gratuity cost. Now, I would say that directionally having achieved this, of course, there are two important levers. One is sustenance of this, is what we have to make sure we are driving. The important contributor to that sustenance and improvement from here on, further improvement, is really going to be on the core ROA. We have to ensure and make sure that we still have some more of benefit that we will get from the J.C. Flowers ARC write backs over the next year.
As we speak, we still have about INR 1,500 crore of face value of securities which can get redeemed over the next few quarters. That, what we have to do over the next year or two is really make sure that we have the core ROA construct to offset that. Not only offset, really expand from beyond, reasonably beyond 1% ROA. I don't want to kind of really put out a number from a core ROA perspective. Our objective internally is really to drive 25-30 basis points of improvement from our core construct. Where we get the margins higher, get our cost structure higher, get our fees higher. Of course, if J.C. Flowers benefits keep coming in, which we are indeed expecting even should play in FY 2027, that further adds to our performance.
Right. Sure. Thanks, Niranjan. Lastly, if you have the number for credit card slippages and maybe PL slippages, it looks like they're clearly improving. If you have the number in absolute rupees growth, I think last quarter was some INR 180 crore for credit card and around INR 140 crore for PL, and that will be very useful. Thank you.
We'll pull that out. I think maybe we might have interchanged the numbers, Jai, from your records.
Okay.
Credit card was about INR 133 crores, and personal loans was about INR 150 crores. That 186 personal loans is down to about INR 160 crores. Credit cards have continued to be in the range of about INR 135 crores-INR 140 crores.
Understood. Sure. Thank you very much, and all the very best.
Thank you, Jai.
Thanks.
Thank you.
Our next question comes from the line of Advait Date from Go Digit Life Insurance Limited . Please go ahead.
Hi, can you hear me?
Yes, please.
Thanks for the opportunity. Congrats on the good set of numbers. A few of my questions have been already answered. I had one question I wanted to get some color on. I wanted to understand a little on our branch expansion strategy. For the full year, we have added around 82 new branches. Wanted to understand how the contribution of retail disbursements has been for the quarter from branches. As we move to the next leg of growth, how are we looking at branch expansion? Which locations you are prioritizing and how that aligns with the loan sub-segments we are trying to prioritize growth in?
For your question, we had paid out a guidance for the next 4-5 years with a plan of around 400 branches, with an average of around 80 branches per annum. We are on course of that. We opened around 82 branches last year, and we would be going ahead with that plan, depending on if there is any upside available to do that. That is point number one. Point number two is on the disbursements. Our internal customer sourcing is approximately 50% of the overall disbursements we do. Out of that, approximately 60% actually comes from the branches, through the branch customers. We would see this actually growing, going forward.
There have been some calibrated growth strategy on the unsecured loans and now with the new rule engines and the new platform, when we look at increasing that share as well, this should also result in increasing the contribution coming from the branches. On the third part, where we look at a branch expansion, we typically look at three points. One, what is the deposit growth happening in and around that pin code? Second one is how is the credit growth happening? Third is how the quality of credit growth available in and around that branch. These are largely the three broader points we keep it in mind while going for any selection of a branch location.
Got it. That's helpful. Just one quick follow-up question on an earlier question asked on RIDF. You did give out the rundown trajectory for the next one year. Wanted to understand how the mix would look like after one year. Would the decline be linear, or would it be accelerated post one year? Thanks.
The reduction of RIDF from here on will, for example, be equally split between FY 2028 and FY 2029, and then there are some maturities in FY 2030. I would say it starts getting thinner in terms of the pace of reduction. FY 2028 will be similar to FY 2027, potentially, but FY 2029, FY 2030 will start getting thinner.
Okay, got it. Thanks. Thank you. That's it from my side. Thanks and all the best.
Thank you.
Thank you. Ladies and gentlemen, in order that the management is able to address questions from all participants in the queue, you are requested to please restrict yourselves to one question only. You may rejoin the queue if you have further questions. Our next question comes from the line of [Dev Dey] from Horsepower Securities. Please go ahead.
Yes. Good evening, gentlemen.
Mr. Dey, good evening to you.
Yes, good evening, everyone. Congratulations on excellent set of numbers.
Thank you so much.
Yes. It seems that the performance has been improving quarter-on-quarter, and it's very pleasant to be part of your story. Now my question is, by the next year, what is your target balance sheet size in terms of loan book? Hello?
Yeah. Hi.
Yes, in terms of loan book size, what would be the target by the end of next year?
We've said we've not put out a specific numerical target. We've said that we will want to have a growth rate in line with the industry, if not be better. Our expectation is that should be in the 13%-15% range.
What percentage? I missed it, sorry.
13%. One, three, one, five. 13%.
Okay. What would be the average targeted interest yield on the book?
For yield on advances, sir, that we've had as we look to exit March, that has been about 9.2%.
9 point? [audio distortion]
9.2. two zero.
Okay. Thank you.
Welcome.
For sharing the details.
Thank you for coming. Thank you.
Thank you. Our next question is from the line of Rama Subba Reddy, an individual investor. Please go ahead.
Am I audible, sir?
You are audible, sir. You may proceed.
Yes.
Good evening, everyone. Hearty congratulations, Vinay sir, for becoming a new MD & CEO of Yes Bank. Yeah, the numbers have been very good. Yeah, the NPA asset quality and also now deposits, 2020 where we were and the 2026, it's 3x growth. Very good. Also the profits also looking promising, like last year, whatever management guided that ROA, we have exited with 1%. Basically my question is, so this ROA, I mean, 2027 and 2028, 2029, the upcoming years. I think we hope to maintain 1% ROA and also on top of that number will grow quarter on quarter on the yearly basis. Can you describe on that, so that we will have good confidence? Whatever we built so far, we will not lose the momentum.
Thank you very much, sir, and thank you for being quite supportive on the bank. We really value that. Thank you for that. On the question on ROA, we've said this, that March 2026, we will look to exit with a 1% ROA. I did also allude to that in my previous response. I think most important thing is now to sustain this 1% ROA. Of course, there is a play that we also have from provision write-back of J.C. Flowers ARC. What we have very emphatically worked upon internally is to say, internal outside of the J.C. Flowers ARC write-backs, we will look to improve our ROA, 25 - 50 basis points and it's a function of net interest margin improvements, is a function of making sure we discipline the cost and containing the credit cost as well. Really that's our endeavor.
What you've said are exactly our aspirations and our ambitions as well, to not only maintain, but to improve over the next 2-3 years on the ROA trajectory.
Yeah. Thank you, sir. Even this RIDF is reduced now. Earlier it was 11%, now it is significantly reduced and I hope that this, RIDF funds and also it can improve the loan growth and also our NIM also. Any target in the next year, to cross 3% or any guidance on that, sir? Currently it is 2.7%.
On that, sir, we've usually refrained from giving a near-term guidance. We've said that structurally over a three-year period, let's say now about 2- to 3-year period, we believe that we will want to get into a 3.25%-3.5% kind of a range from a margin perspective. As you rightly pointed out, RIDF is going to be an important contributor to getting the net interest margins higher as well. That's really one big driver. Second, we have to make sure that our loan spreads are quite disciplined and there's a lot of work that we've already done from a cost of funding standpoint. If you look at our savings account rate, over the last 1 year, we've taken the benefit of this reducing rate cycle to cut our rates by over 150 basis points.
Savings account rate, which was blended 6% is now well below 4.5%. We've taken another rate action in April as well. Our objective is to also make sure that we are focused on getting our cost of deposit, which we believe is very core to a bank and its liabilities to get that cost of deposit structure lowered as well. Not only RIDF, which anyway is on a bit of an auto mode of rundown, but work hard to also get the loan spreads improved through our cost of deposits and funding as well. That we believe should help the margins. Last is, as the Retail growth is now coming back, and as the mix starts playing out on the loans as well, that will also indeed help us improve the asset advance yields and therefore start playing into our margins as well.
We will work hard to make sure that we are driving each of these vectors to the right direction.
Yeah. Last question. Is there any plan like-
Please rejoin the queue if you have any further questions, please.
Okay.
Thank you. Our next question comes from the line of Amit Varma, an individual investor. Please go ahead.
Thank you for giving me the opportunity. Congratulations on maintaining the growth momentum of performance. This is heartening. Can you give us an update on the AT1 bonds case, and what do you think would be the impact on the balance sheet in the case of an adverse judgment?
On the AT1 matter, this matter is sub judice, as you all know. The hearings have taken place at the Supreme Court and the matter is also reserved for judgment. We will wait to hear from the Supreme Court, Honorable Supreme Court, on the verdict. We will make sure that we are also coming back to all our stakeholders and updating them on what the outcome and its impact on the bank would be. I would refrain from passing a judgment on what we expect. We stated this earlier as well. We do believe the actions we took were in line with the contractual obligations and the processes that were allowed. It is important that we respect the proceedings of the court and allow the judgment to be out.
Thank you.
Thank you. Our next question is from the line of Shreyank from Sundaram Asset Management Company. Please go ahead.
Hi. Am I audible?
Yes, please. Go ahead.
Hi. Firstly, congrats on an amazing result. I just want your quick view on the West Asia war and its impact on the MSME segment, given that it's one of your key growth drivers. Where do you see that is still planning to continue growing it, and how do you factor the stress over there?
Sure. Thanks. We are proactively monitoring our portfolio, and this is the exercise that we've already started. It's good to report that all our clients, whether it's an MSME or larger clients, have been managing well. They have not shown any signs of stress. This is a space that we will continue to watch because it will have an impact on the inflation, and there can be second-order impact. We continue to monitor our portfolio closely and talk to our clients to understand the impact and the actions that they're going to take. Currently, since we have had a good client selections over the years, all our clients have been able to manage this crisis well.
Okay, perfect. Thank you so much.
Thank you.
Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to Mr. Vinay M. Tonse for closing comments. Over to you, sir.
Yeah. Thank you so much, and I must place my sincere appreciation on record for all the esteemed analysts who could make it today. I know, of course, it's a Saturday afternoon and also a very busy day because the other two banks also that came in today. I appreciate you taking time off and then coming and joining us. Thank you very much.
Thank you. This brings the conference call to an end. On behalf of Yes Bank, we thank you all for joining us. You may now disconnect your lines.