The acquisition of YES Bank stake by Sumitomo Mitsui Banking Corporation (SMBC) is likely to be completed in September, the bank said in a post-earnings call on July 19. For the first quarter ended June, the bank reported a net profit of Rs 801 crore, up 59% year-on-year (y-o-y). While the bank’s net interest income grew by 5.7% to Rs 2,371 crore in Q1FY26 on back of a decrease in cost of fund.
Margins Improve
For Q1FY26, the net interest margin (NIM) was recorded at 2.5%, showing a y-o-y increase, supported by a reduction in deposits due to priority sector lending shortfall and a reduction in saving account rates, though this was somewhat countered by the impact of repricing. The quality of assets remained constant, with gross non-performing assets (GNPA) at 1.6% and net NPAs standing at 0.3%. The provision coverage ratio (PCR) saw an increase to 80.2%.
SMBC to Become Largest Shareholder
Meanwhile, SMBC has submitted an application to the Reserve Bank of India (RBI) and the Competition Commission of India (CCI), and the bank is hoping that the deal may be concluded in September. After the transaction, SMBC will become the largest shareholder of the bank.
In May, SMBC entered into an agreement to acquire a 20% stake in YES Bank, making it India’s largest cross-border transaction in the banking sector. It will buy a 13.19% stake from the State Bank of India (SBI) and a 6.81% aggregate stake from other banks, such as Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank.
“A strong partnership with SBI has been pivotal in our journey, and SBI will remain a major shareholder,” the bank said in its investor presentation. SBI holds a 24% stake in Yes Bank, and the other seven banks have a shareholding of 9.4%. SMBC is a wholly-owned subsidiary of Sumitomo Mitsui Financial Group. “The transaction is a significant milestone to drive Yes Bank’s next phase of growth, profitability, and value creation, leveraging SMBC’s global expertise in this phase,” the bank said.