Yes Bank shares jump 8% as SMBC inches closer to deal

Shares of private sector lender Yes Bank jumped as much as 8.5% to an intraday high of Rs 19.24 on Tuesday morning after ET reported that Japanese financial powerhouse Sumitomo Mitsui Banking Corp (SMBC) is in advanced talks to acquire a significant stake in the bank from SBI.

Senior leaders from the Japanese conglomerate met their counterparts at State Bank of India (SBI), along with other key shareholders, in Mumbai last week to finalise the terms, the report said.

SBI, which currently holds a 24% stake in the lender, has been looking for a new strategic investor. If the deal materialises, it is expected to trigger an open offer for an additional 26% stake in the bank, the sixth-largest private lender by assets. A successful deal and open offer could make SMBC the single-largest shareholder in Yes Bank.

Also read | Japan's financial powerhouse SMBC moves a step closer to taking control of Yes Bank

A 51% stake sale would mark the largest M&A deal in India’s banking sector. It is also expected to be the biggest investment by the Japanese financial group in the country since its $2 billion acquisition of a 74.9% stake in non-banking finance company (NBFC) Fullerton India Credit in 2021.

Besides SBI, domestic banks and financial institutions such as HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, and LIC collectively own 11.34% of Yes Bank. As of March, private equity funds Advent International and Carlyle held 9.20% and 6.84%, respectively.

Yes Bank’s total deposits rose to Rs 2.85 lakh crore in FY25 — a 2.7x increase since March 2020, when the rescue package was implemented. Gross non-performing assets (NPAs) have declined to 1.6% and net NPAs to 0.3% in FY25, down from 16.8% and 5%, respectively, in FY20.

For the full year, the bank reported a net profit of Rs 2,406 crore — a 93% jump over the previous year — compared to a loss of Rs 16,418 crore in FY20. However, net interest margin remained largely stable at 2.4% in FY25 versus 2.2% in FY20.