IDBI Bank vs Yes Bank (2026): NIM, ROA, Turnaround, Ownership & Which Is Better?

IDBI Bank vs Yes Bank: Q1 FY2027 scoreboard

IDBI's NIM is also materially stronger

3.61% versus Yes Bank at 2.7%.

The 91-basis-point gap is enormous in banking.

It means IDBI starts each quarter with substantially more core spread income relative to earning assets.

This advantage exists despite Q1 NIM itself declining from IDBI's prior quarter.

That sequential NIM decline is important

IDBI's NIM was 4.15% in Q4 FY2026 and fell to 3.61% in Q1 FY2027.

So the current 3.61% remains strong relative to Yes Bank, but the direction should not be ignored.

The bank needs to demonstrate that margin stabilises as:

• loan mix changes.
• deposit repricing continues.
• competition for quality borrowers remains intense.

The liability franchise gives IDBI a strong starting point

CASA ratio:

43.64%.

Yes Bank:

32.7%.

IDBI therefore has a much larger share of deposits in lower-cost current and savings accounts.

Its Q1 cost of deposits fell to approximately 4.59%.

Cost of funds fell to around 4.68%.

But IDBI's CASA ratio is moving in the wrong direction

It was approximately 44.63% a year earlier.

It fell to 43.64%.

The absolute CASA balance still grew 7% year on year.

The ratio fell because other deposit categories grew faster.

This is not a liability crisis, but it is worth monitoring because the high CASA ratio is a key part of IDBI's NIM advantage.

IDBI is also growing credit faster

Net advances increased approximately 22% year on year to ₹2,58,968 crore.

Yes Bank grew around 18.3%.

IDBI's loan mix is approximately 70% retail and 30% corporate on a gross-advances basis.

This creates a relatively granular growth profile rather than a bank dominated by large corporate exposures.

The credit-deposit ratio gives IDBI more funding room

IDBI:

79.50%.

Yes Bank:

roughly 90.5%.

Yes Bank is deploying a much larger proportion of deposits into loans.

That can support NII growth.

It also means future high-teens credit growth requires stronger ongoing deposit mobilisation.

This is a much stronger operating trajectory than the old Yes Bank turnaround story

For years, the Yes Bank thesis centred on survival, recapitalisation and cleaning up historical stress.

Q1 FY2027 looks different.

The discussion is increasingly about:

• loan growth.
• NII growth.
• fees.
• operating leverage.
• ROA progression.

That is the correct evolution for a repaired bank.

Asset quality has become a genuine Yes Bank strength

GNPA:

1.3%.

IDBI:

2.30%.

Yes Bank therefore has the cleaner gross recognised NPA stock.

Gross slippages also declined to approximately ₹964 crore from ₹1,458 crore a year earlier.

Yes Bank management also highlighted the lowest retail slippages in ten quarters

This is important because the bank is accelerating retail lending.

Fast retail growth is only valuable if newer vintages remain clean.

The current slippage trend gives positive early evidence.

IDBI wins after provisioning

Net NPA:

IDBI 0.16%.

Yes Bank 0.20%.

The difference is small.

The provisioning difference is not.

IDBI provision coverage is approximately 99.31%.

Yes Bank is around 81.7%.

IDBI's 99%+ provision coverage creates an unusually protected recognised NPA book

IDBI has maintained provision coverage above 99% for an extended period.

This means virtually all recognised gross stress has already been economically absorbed through provisions or technical write-offs.

It gives shareholders significant protection against old recognised NPAs.

But gross NPA still matters

IDBI's 2.30% GNPA is materially above Yes Bank's 1.3%.

Provisioning can protect earnings from an existing bad loan.

It does not make the operational work of recovery disappear.

Yes Bank therefore deserves credit for carrying the cleaner gross recognised book.

Capital creates the largest gap in the entire comparison

IDBI Bank CRAR:

26.92%.

Tier 1 / CET I disclosed ratio:

26.38%.

Those are exceptionally high numbers for a commercial bank.

IDBI has far more regulatory-capital headroom than it currently needs to support its balance sheet.

Why does so much capital matter?

It gives IDBI strategic flexibility to:

• grow risk-weighted assets.
• absorb ECL or regulatory changes.
• support a new controlling shareholder's strategy.
• avoid near-term dilutive equity raising.

It also creates a profitability trade-off.

Excess equity reduces financial leverage and can suppress ROE.

This explains why IDBI's ROE looks less spectacular than its ROA

ROA:

1.89%.

ROE:

14.80%.

A bank with less capital leverage could produce a much higher ROE from the same ROA.

IDBI's current capital surplus therefore creates future capital-deployment optionality.

Yes Bank has the opposite challenge

Its problem is not excess capital suppressing an otherwise spectacular ROA.

Its ROA itself is still around 0.9%.

That means the next leg of shareholder-return improvement needs stronger operating profitability.

Yes Bank's cost-to-income ratio identifies exactly where the opportunity sits

Q1 cost-to-income:

62.8%.

A year earlier:

67.1%.

The improvement is real.

The absolute level remains high.

IDBI's cost-to-net-income ratio was 52.02%.

A ten-percentage-point efficiency gap is enormous

Yes Bank currently spends much more of its operating revenue running the franchise.

If cost-to-income falls toward the mid-50s while NII grows mid-teens, operating leverage can materially raise ROA.

This is arguably more important than whether loan growth is 18% or 20%.

IDBI has its own cost issue this quarter

IDBI's cost-to-net-income ratio worsened from 48.86% a year earlier to 52.02%.

Non-interest income fell 28% year on year to approximately ₹1,032 crore.

This pressured operating profit despite healthy NII growth.

IDBI is already the more profitable bank, but Q1 was not perfect.

This is why PAT growth alone can be misleading

IDBI PAT growth:

only 5%.

Yes Bank:

33.7%.

Yet IDBI's ROA is more than twice Yes Bank's.

Growth rate measures change.

ROA measures the profitability level being changed from.

A low-return bank can grow profit much faster while still remaining less profitable.

For a commercial stock comparison, both level and direction matter

IDBI: high profitability level, moderate current earnings growth.

Yes Bank: lower profitability level, much faster current improvement.

The better stock outcome depends on whether the market has already priced those trajectories correctly.

The Yes Bank strategic catalyst is no longer speculative

SMBC's ownership can potentially strengthen:

• governance.
• risk management.
• Japanese corporate relationships.
• cross-border banking.
• brand confidence.
• funding access over time.

But strategic sponsorship is an input.

It still has to appear in NIM, fees, ROA and ROE before shareholders receive the full economic benefit.

This prevents another common mistake: valuing Yes Bank as though SMBC economics are already fully realised

The ownership is completed.

The operating transformation is not.

Q1 ROA around 0.9% and cost-to-income of 62.8% demonstrate how much work remains.

IDBI's strategic catalyst carries much greater event risk

India's strategic divestment process has been running for years.

Revised bids from Fairfax Financial and Emirates NBD revived the process in 2026.

By August, Reuters reported Fairfax was poised to acquire a majority stake and that the proposal had cleared a senior bureaucratic stage.

But final governmental and regulatory approvals remained outstanding.

As of August 31, 2026, the transaction is not complete.

That distinction should affect valuation discipline

An investor can reasonably assign some probability-weighted value to a potential strategic change.

An investor should not treat:

• Fairfax as the final owner.
• the purchase price as fixed.
• future strategy as known.
• regulatory approval as guaranteed.

until the transaction actually closes.

IDBI's strongest defence against event disappointment is that the underlying bank is already profitable

If the strategic sale takes longer than expected, IDBI still owns:

• 1.89% ROA.
• 3.61% NIM.
• 22% loan growth.
• 43.64% CASA.
• 0.16% NNPA.
• 26.92% capital adequacy.

The thesis does not collapse into an empty event shell.

Yes Bank's strongest defence is that its operating turnaround is already accelerating

If strategic synergies from SMBC arrive slowly, Yes Bank still has:

• 17.5% NII growth.
• 18.3% credit growth.
• 14.3% deposit growth.
• 25.5% operating-profit growth.
• 1.3% GNPA.

This is no longer a business whose entire thesis depends on a new shareholder.

The valuation tells us investors already distinguish profitability level from growth rate

August 28, 2026:

• IDBI Bank price: approximately ₹92.66.
• IDBI P/E: 10.69x.
• IDBI P/B: 1.59x.
• Yes Bank price: approximately ₹22.10.
• Yes Bank P/E: 18.37x.
• Yes Bank P/B: 1.32x.

IDBI is much cheaper on earnings

10.69x versus 18.37x.

That is roughly a 42% lower P/E multiple.

And IDBI currently produces the much higher ROA.

On a simple earnings-plus-current-profitability comparison, IDBI is difficult to dismiss.

Why is IDBI more expensive on book value?

Because each rupee of IDBI's book currently earns far more.

IDBI P/B:

1.59x.

Yes Bank:

1.32x.

The approximately 20% book-value premium is much smaller than the ROA gap.

This is why P/B and P/E produce different conclusions.

Yes Bank's 18x-plus P/E is a bet on future operating leverage

The current earnings base is still relatively small compared with the equity franchise and deposit base.

Investors paying the higher earnings multiple need:

• ROA to keep rising.
• cost-to-income to keep falling.
• NIM to improve.
• SMBC-linked opportunities to produce revenue.
• credit growth to remain clean.

If Yes Bank reaches 1.2%-1.3% ROA, the earnings equation changes materially

That does not require doubling the balance sheet.

It requires better profit conversion from the existing one.

The most powerful route is likely:

higher NII

plus

lower operating-cost intensity

plus

controlled credit costs.

IDBI's valuation has a different risk

The bank already earns high ROA.

The market may therefore have capitalised both:

• strong current economics.
• some probability of a successful strategic sale.

If the sale is delayed, terms disappoint, or post-sale strategic benefits prove modest, event premium can disappear even while the bank remains profitable.

The scenario tree makes the trade-off clearer

Yes Bank has its own three scenarios

Bull Run's market snapshot shows the stocks are already trading on very different expectations

IDBI's three-month momentum reflects renewed event attention

Bull Run's August 25 snapshot showed approximately 20% three-month return.

That period overlaps with renewed progress in the strategic-sale process.

Investors should therefore separate:

price movement caused by improving bank fundamentals

from

price movement caused by transaction expectations.

Yes Bank's stronger one-year return reflects a different rerating

Yes Bank had gained approximately 15% over one year despite weaker short-term momentum.

The market has increasingly recognised:

• SMBC sponsorship.
• better loan growth.
• lower GNPA.
• improving operating profit.

But the Bull Run Score remains lower because current profitability and valuation remain less compelling.

There is also a useful funding-market datapoint from August

Yes Bank had considered a roughly $500 million dollar bond issue but withdrew the plan along with Federal Bank and RBL Bank when market pricing became unattractive.

This should not be interpreted as a solvency issue.

The banks chose not to accept uneconomic funding costs.

It does illustrate that external wholesale funding remains price-sensitive even for improving franchises.

For Yes Bank, granular deposits therefore matter even more

With a credit-deposit ratio around 90%, continued high-teens loan growth needs:

• strong retail deposits.
• CASA improvement.
• disciplined wholesale funding.

The 14.3% deposit growth in Q1 is healthy.

Keeping deposits closer to loan growth is important for maintaining NIM.

IDBI has more balance-sheet funding headroom

Its 79.5% credit-deposit ratio gives it more room before liability growth becomes restrictive.

That is especially valuable if a new strategic shareholder eventually wants to accelerate credit growth.

The bank would begin that phase with unusually strong capital and reasonable funding capacity.

The single most important IDBI metric from here is NIM durability

IDBI already has the capital.

It already has the low NNPA.

It already has high ROA.

What needs monitoring is whether 3.61% NIM stabilises after the sharp sequential decline from 4.15%.

If margin keeps compressing, today's ROA advantage can narrow.

The single most important Yes Bank metric is cost-to-income

Yes Bank does not need another shareholder transaction.

It needs the 62.8% ratio to keep falling.

If it moves through the high-50s while NII continues growing mid-teens, operating profit can compound substantially faster than assets.

That is the bridge from turnaround bank to high-return bank.

IDBI Bank vs Yes Bank FAQs

Which bank is more profitable today?

IDBI Bank, with approximately 1.89% ROA versus Yes Bank around 0.9%.

Which has higher NIM?

IDBI Bank at approximately 3.61% versus Yes Bank at 2.7%.

Which has higher CASA?

IDBI Bank at approximately 43.64% versus Yes Bank at 32.7%.

Which is growing loans faster?

IDBI Bank at approximately 22% versus Yes Bank at 18.3%.

Which has lower GNPA?

Yes Bank at approximately 1.3% versus IDBI Bank at 2.30%.

Which has lower NNPA?

IDBI Bank slightly, at approximately 0.16% versus Yes Bank at 0.2%.

Which has stronger provision coverage?

IDBI Bank by a wide margin, at approximately 99.31%.

Has IDBI Bank been sold to Fairfax?

No. As of August 31, 2026, Fairfax has been reported as the frontrunner, but the strategic sale has not completed and remains subject to final approvals and transaction execution.

Does SMBC control Yes Bank?

SMBC is Yes Bank's largest shareholder with approximately 24.9%. That strategic stake is completed, but investors should not assume this guarantees any specific future profitability outcome.

Which stock is cheaper?

IDBI Bank is much cheaper on late-August P/E, while Yes Bank is cheaper on P/B.

Where can investors compare them on Bull Run?

Use the IDBI Bank stock page, Yes Bank stock page and Bull Run's Private Sector Bank sector research.

Research sources

• Bull Run — IDBI Bank
• Bull Run — Yes Bank
• Bull Run — Private Sector Bank sector research
• IDBI Bank official FY2027 disclosures
• IDBI Bank official Q1 FY2027 press release
• YES Bank official corporate announcements
• YES Bank official investor presentations
• DIPAM — Government of India disinvestment information
• IDBI Bank late-August valuation data
• Yes Bank late-August valuation data