Yes Bank Shares Jump on Potential SMBC Stake Increase
During Monday’s trading session, the share price of private lender Yes Bank increased by over 3% to ₹23.30 per share. This came after it was revealed that Sumitomo Mitsui Banking Corporation (SMBC) is willing to purchase a bigger portion of the bank. The Economic Times said that, subject to regulatory approval, the Japanese financial institution, which presently owns a 24.99% interest in Yes Bank, is willing to purchase further shares.
We followed what the regulators allowed us to do. The regulators allowed us to buy up to 24.99%, which is what we have done. If there is an option to do more, we may be open to it. If there are the right opportunities, we can go beyond (24.99%). But I think that is obviously subject to regulatory discussions,
SMBC managing executive officer and head of India division Rajeev Kannan
Kannan Confirms SMBC Exploring Full Ownership in India
Regarding the possibility of increasing his ownership of the private loan firm, Kannan shared his thoughts. Kannan further claims that the financial institution is considering creating a fully owned company in India.
If there are credible opportunities to grow beyond organically, then I think there could be opportunities; we are open to doing that. We have probably invested nearly $7 billion, including our NBFCs, our branches in India, which is one of the largest (by a foreign bank in India).
Kannan
He continued by saying that the company is aggressively working toward the establishment of a local unit in India, which is essential for long-term operations. The head of SMBC India, however, did not clarify if the bank had submitted an application to the Reserve Bank of India (RBI) for a local unit license.
Yes Bank Shows Strong Profitability Despite Competitive Lending Market
Due to increased other income and lower interest costs, Yes Bank reported an 18.3% year-over-year increase in standalone net profit to ₹654.5 crore for Q2 FY25. Despite difficulties with the bank’s primary revenue, this growth took place. A competitive lending environment is reflected in the bank’s net interest income (NII), which decreased 3% year over year to ₹2,300.9 crore. According to the bank’s exchange report, total income for the quarter was ₹9,023.2 crore, which was 1.2% less than the same period the previous year. Overall, asset quality did not change. Gross non-performing assets (GNPA) were ₹4,055.3 crore, up 4.3% from the previous year. The GNPA ratio, however, remained unchanged from the prior year at 1.6%.
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