Why YES Bank shares are trading higher today

Shares of YES Bank rallied nearly 10% on Tuesday, in an otherwise subdued broader market, on reports that Japanese banking giant Sumitomo Mitsui Banking Corp is looking to buy majority stake in the private lender. Media reports suggest that Sumitomo Mitsui Banking Corp (SMBC) looks to acquire up to 51% stake in the mid-sized private lender. Fortune India could not verify the report and there was no official update from the bank or the Reserve Bank of India (RBI) in this regard.

Following the reports, YES Bank shares jumped 9.6% to hit a high of ₹19.44 on the BSE, while its market capitalisation climbed to ₹57,200 crore. The banking stock inched closer to its 10% upper circuit limit of ₹19.50.

Early today, YES Bank share price opened 8.5% higher at ₹19.24 after ending 0.11% higher in the previous session. At the time of reporting, the counter was up by 2.8% at ₹18.23, paring most of early gains.

The shares of YES Bank touched its 52-week high of ₹27.41 on July 8, 2024, and its 52-week low of ₹16.02 on March 12, 2025. The banking share has delivered a negative return of around 25% in the past one year, while it lost nearly 13% in six months. The midcap stock has risen 8% in a month.

Japan’s SMBC mulls buying majority stake

The stock gained momentum today amid reports that SMBC is mulling to acquire a controlling stake in the Mumbai-based lender.  State Bank of India (SBI), which currently owns a 23.97% stake in YES Bank, is reportedly in talks with SMBC to sell up to 20% of its holding in the private lender. The PSU bank is looking for an exit after YES Bank's turnaround since its 2020 rescue, when the central bank had taken control following a liquidity crisis.

If the deal is finalised, SMBC would become the largest investor in the bank. This could trigger an open offer for an additional 26% of YES Bank. Other banks such as Axis Bank, Kotak Mahindra Bank, and HDFC Bank, which stepped in to rescue YES Bank in 2020, are also planning to offload their stake in the Mumbai-based lender.

Delivers strong growth in March quarter

On May 3, YES Bank released its March quarter earnings report, with its net profit surging 63.3% year-on-year (YoY) to ₹738 crore. For the full financial year, the lender clocked a profit of Rs 2,406 crore, up 92.3% from the year ago fiscal.

The bank's fourth quarter net interest income (NII) came in at ₹2,276 crore, up 5.7% YoY, and the full year NII grew 10.5% to ₹8,944 crore. The net interest margin (NIM) for Q4 FY25 stood at 2.5%, showing a sequential upward trend, while the FY25 NIM remained at 2.4%, up 14.5% YoY at ₹5,857 crore.

The private lender informed exchanges that  it achieved full priority sector lending (PSL) compliance in FY25, leading to a reduction in mandated deposits for PSL shortfalls.

YES Bank said its balance sheet grew 4.4% during the quarter under review, while the net advances rose 8.1% YoY aided by growth in SME and mid-corporate advances (at 23.6% & 21.8% YoY, respectively). The private lender said its asset quality metrics and provision coverage ratio also improved during Q4 FY25. The gross non-performing assets (GNPA) stood at 1.6% versus 1.7% in the year-ago quarter, while net non-performing assets (NNPA) was at 0.3% as against 0.6% in Q4 FY24.

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