IDFC First Bank vs Yes Bank (2026): NIM, CASA, ROA, Turnaround & Which Is Better?

IDFC First Bank vs Yes Bank: Q1 FY2027 scoreboard

Why is 50.8% CASA so valuable?

Current and savings accounts generally cost much less than term deposits and wholesale borrowing.

A bank with more low-cost deposits can either:

• Earn a higher NIM.
• Offer competitive loan pricing while preserving margin.
• Take less credit risk for the same return.
• Absorb policy-rate cycles more comfortably.

IDFC First's 5.96% NIM is not created by CASA alone.

Its lending mix also carries much higher yields than traditional corporate-heavy banks.

But a 50%+ CASA franchise supports that model.

CASA is still growing faster than total deposits

CASA deposits increased 24.6% year on year.

Customer deposits increased 16.6%.

This is exactly the direction a high-growth bank wants.

Funding is not merely growing.

The lower-cost component is gaining share.

IDFC First's loans are now growing above 20%

Total loan assets reached approximately ₹3.05 lakh crore, up 20.6% year on year.

The incremental growth was driven by several engines:

• Mortgages.
• Vehicle finance.
• Consumer loans.
• Corporate loans.
• MSME and business banking.

The Retail, Agriculture and MSME portfolio grew approximately 18.2%.

Wholesale grew 30.4%.

This is a much more diversified bank than the old Capital First retail-lending story.

Wholesale growth of 30% changes the risk mix

Corporate growth can reduce portfolio yields but also improve scale and relationship economics.

A corporate borrower may generate:

• Working-capital loans.
• Cash-management fees.
• Trade finance.
• FX income.
• Employee salary accounts.
• Transaction banking.

The value of the relationship can therefore exceed the spread on the loan itself.

Then why does IDFC First earn only 1.06% ROA despite a 5.96% NIM?

This is the central weakness in the investment case.

A wide NIM should theoretically create outstanding ROA.

IDFC First still spends a large portion of revenue building and operating the franchise.

Cost-to-income excluding trading gains was approximately 70.7%.

That means roughly 71 paise of each ₹1 of operating income is currently consumed before provisions and tax.

The bank is carrying the cost of businesses built before they reached scale

IDFC First has spent years creating products and infrastructure that did not exist at the old IDFC Bank.

This includes:

• 1,155 branches.
• Retail deposit infrastructure.
• Credit cards.
• Digital banking.
• Wealth management.
• Rural banking.
• Merchant payments.
• Customer-service infrastructure.

Many of those businesses initially consume more cost than revenue.

The bull case is that revenue eventually catches up while the fixed infrastructure grows more slowly.

Credit cards show how operating leverage could work

IDFC First has more than 4.8 million cards in force.

The bank's internal cost-to-income ratio for the card business has already fallen dramatically as the business scaled.

This is the economic model management hopes to repeat across newer franchises.

Infrastructure gets built once.

More customers and balances are then pushed through the same infrastructure.

The second reason IDFC's high NIM does not fully reach shareholders is credit cost

Provisions represented approximately 1.53% of average loans during Q1.

That is a substantial charge.

Part of the recent pressure came from India's microfinance cycle.

The bank reduced its MFI book from about ₹13,344 crore in FY2024 to approximately ₹6,698 crore by June 2026.

MFI is now much smaller but still matters to earnings

Microfinance used to carry yields around 23%.

Shrinking the book therefore did two things simultaneously:

It reduced credit risk.

It also removed high-yielding revenue.

This is why the MFI cleanup temporarily made both credit cost and operating leverage look worse.

The CGFMU claim makes Q1 profit more complicated than the 132% headline

IDFC First received approximately ₹514.8 crore of CGFMU claims against the MFI portfolio.

That helped reduce the economic loss from defaults.

Management simultaneously created approximately ₹515 crore of contingency provision for macro and geopolitical uncertainty.

The two amounts almost offset each other.

This is a useful sign of prudence.

Investors should still avoid extrapolating 132% PAT growth mechanically.

93% of the remaining MFI book is covered under CGFMU

The bank says disbursements since January 2024 are covered and approximately 93% of the total MFI book was covered by June 2026.

This reduces loss severity if borrower stress reappears.

It does not remove:

• Operational risk.
• Collection risk.
• Geographic concentration.
• Political intervention risk.
• Timing differences in claim recovery.

The MFI portfolio has begun growing again

Management says the earlier contraction has bottomed out and lending is restarting under tighter guardrails.

This can support future NIM and operating leverage.

It can also restart credit risk if underwriting discipline weakens.

The right metric is not MFI growth.

It is risk-adjusted NII after provisions.

IDFC First already publishes that metric

Risk-adjusted NII reached approximately 4.75% of average assets in Q1 FY2027.

This subtracts provisions from NII before comparing the result with assets.

For a high-yield lender, this is more informative than NIM alone.

A 6% NIM with 3% credit cost can be worse than a 4% NIM with almost no losses.

Yes Bank has already repaired the most dangerous part of the old balance sheet

GNPA was approximately 1.3% and NNPA 0.2%.

Those ratios are better than IDFC First's 1.51% and 0.44%.

This is a remarkable outcome for a bank that required reconstruction in 2020.

The current investment problem is no longer survival.

It is profitability.

Yes Bank's remaining weakness is the spread

A 2.7% NIM gives the bank much less room for mistakes.

Every rupee of operating cost or provision consumes a larger proportion of underlying banking income.

Management therefore needs margin improvement to create the next leg of ROA growth.

NIM is at least moving in the right direction

It improved from 2.5% a year earlier to 2.7%.

Cost of deposits declined around 50 basis points to approximately 5.4%.

The bank also reduced expensive balances associated with priority-sector shortfall requirements.

These are structural improvements.

Yes Bank has already crossed one important efficiency milestone

Cost-to-income declined from 67.1% to 62.8%.

Operating profit increased 25.5%.

Core fee income increased 18.7%.

This is the mechanism through which a 2.7% NIM franchise can still grow earnings rapidly.

Yes Bank is currently more efficient than IDFC First

62.8% cost-to-income versus 70.7%.

This difference is large.

IDFC has the wider revenue spread.

Yes currently loses less of its revenue to operating expenses.

If IDFC's cost ratio falls sharply with scale, that advantage can reverse.

Yes Bank's advances are growing 18.3%

Net advances reached approximately ₹2.85 lakh crore.

Deposits reached ₹3.15 lakh crore.

Deposits grew 14.3%.

The bank is therefore expanding credit faster than liabilities.

Its credit-deposit ratio reached approximately 90.5%.

IDFC First has an even more fully deployed customer-deposit franchise

IDFC First's ₹3.05 lakh crore loan assets are slightly above its ₹2.99 lakh crore customer deposits.

The bank also has certificates of deposit and borrowings.

Total deposits including CDs were approximately ₹3.12 lakh crore.

The key point is that both banks need sustained liability growth if they want high-teens credit growth to continue.

The quality of those liabilities is where IDFC First wins

50.8% CASA versus roughly 32.7% at Yes Bank.

This gives IDFC more low-cost funding optionality.

Yes Bank is rebuilding precisely this type of granular franchise.

Strategic ownership matters only when it changes financial metrics

The ultimate SMBC scoreboard is not the shareholder register.

It is:

• NIM.
• Current-account balances.
• Corporate fee income.
• Funding cost.
• ROA.
• ROE.

A prestigious shareholder can improve confidence.

It cannot substitute for better economics.

Vinay Tonse now leads the second stage of the Yes Bank turnaround

He formally became MD & CEO in April 2026.

The first recovery phase under prior management focused heavily on survival, capital, NPAs and confidence.

Tonse inherits a bank where those foundations are much healthier.

His job is to build a commercially stronger franchise on top of them.

The targets are becoming more ambitious

Management has discussed loan growth in the mid-to-high teens and a structural NIM moving above 3% over time.

If Yes moves from 2.7% toward 3%+ while cost-to-income falls toward the mid-50s, ROA can rise without requiring reckless credit growth.

That is the cleanest turnaround pathway.

IDFC First's profitability target is even more ambitious

The bank's long-term design is aimed at a 16%+ ROE franchise.

Current ROE is only 8.98%.

That gap tells investors both the opportunity and the risk.

The valuation assumes significant operating leverage remains ahead.

Where does IDFC's future ROE improvement come from?

• Cost-to-income falling from 70%+.
• Microfinance normalising.
• Credit costs declining.
• Branch productivity improving.
• Credit-card economics maturing.
• Wholesale fee relationships scaling.
• Deposit growth funding more assets.

IDFC does not need much more NIM.

It needs more of its existing NIM to survive the journey to the bottom line.

Where does Yes Bank's future ROE improvement come from?

• NIM moving above 3%.
• Cost-to-income declining further.
• Core fees scaling.
• SMBC cross-sell.
• Higher asset growth.
• Stable sub-1% ROA credit-loss environment.

Yes Bank needs a better revenue engine.

IDFC First needs better conversion of an already strong revenue engine.

The valuations now make the comparison uncomfortable for IDFC First

Late-August 2026 market data places IDFC First at roughly 31x trailing earnings and 1.47x book.

Yes Bank trades around 18x earnings and 1.32x book.

IDFC's book-value premium is not especially large.

Its earnings premium is.

Why is IDFC's P/E so much higher?

Because trailing earnings still reflect the microfinance downturn and a relatively low current ROE.

The market is effectively paying for future operating leverage.

If Q1's ₹1,075 crore earnings level becomes a new base and continues expanding, the P/E can compress quickly without the share price falling.

If profitability stalls, 30x earnings becomes difficult to defend.

Yes Bank's cheaper P/E does not automatically make it cheaper economically

ROE remains only around 8.3%.

A bank producing single-digit ROE should not command the same book-value multiple as a bank sustainably producing 15%-20% ROE.

The low P/B reflects that weaker current equity productivity.

Yes becomes truly inexpensive if ROE improves faster than the share price.

The market has already rerated IDFC First faster

IDFC First was trading close to its 52-week high in the snapshot.

Expectations have therefore already moved higher after the record Q1 result.

IDFC First Bank vs Yes Bank FAQs

Which bank is larger?

Their current loan and deposit franchises are surprisingly similar. IDFC First has approximately ₹3.05 lakh crore of loan assets and ₹2.99 lakh crore of customer deposits, while Yes Bank has approximately ₹2.85 lakh crore of advances and ₹3.15 lakh crore of deposits.

Which has the higher NIM?

IDFC First Bank at 5.96%, compared with Yes Bank at 2.7%.

Which has the better CASA ratio?

IDFC First Bank at 50.8% versus Yes Bank around 32.7%.

Which is growing loans faster?

IDFC First Bank, at approximately 20.6% year-on-year versus Yes Bank at 18.3%.

Which has better asset quality?

Yes Bank currently has lower reported GNPA and NNPA ratios.

Which has higher ROA?

IDFC First Bank at approximately 1.06% versus Yes Bank at 0.9%.

Why does IDFC First have such high NIM but only 1.06% ROA?

Its operating-cost ratio and credit costs remain relatively high. The bank is still absorbing the cost of building branches, deposit infrastructure, credit cards, rural banking and other businesses while also normalising its microfinance portfolio.

Which stock is cheaper?

Yes Bank on current trailing earnings and book-value multiples.

What does SMBC own in Yes Bank?

SMBC owns approximately 24.9% and is the largest shareholder.

Where can investors check Bull Run data?

Use the IDFC First Bank stock page and Yes Bank stock page.

Research sources

• Bull Run market and standardised stock data
• IDFC First Bank official financial reports
• IDFC First Bank official Q1 FY2027 press release
• IDFC First Bank official Q1 FY2027 investor presentation
• Yes Bank official investor relations
• Yes Bank strategic shareholder presentation