SMBC stake deal likely to conclude by September, says Yes Bank CEO Prashant Kumar

Prashant Kumar, MD and CEO, YES Bank

The closure of the proposed stake acquisition by Sumitomo Mitsui Banking Corporation (SMBC) and other investors is likely by September 2025, according to Yes Bank’s MD & CEO Prashant Kumar.

“SMBC has already made applications to both the RBI and the Competition Commission of India,” Kumar confirmed during the Q1 FY26 earnings call. “We are hopeful that the deal will be able to conclude, say, in the month of September.”

The transaction, expected to take SMBC’s holding to 20 percent. Kumar, however, declined to comment on specifics related to SMBC’s regulatory submissions, indicating those questions are best addressed to SMBC.

The bank reported its seventh consecutive quarter of profit expansion, with net profit rising 59.4 percent year-on-year to Rs 801 crore. While this was Yes Bank’s best quarterly performance since its reconstruction, Kumar emphasised that the growth was driven by a tightly managed expense line rather than aggressive top-line expansion. “Much of the bottom-line accretion has come from squeezing the opex part,” he said, hinting that there’s limited room left for similar cost gains in future quarters.

“Our focus is on profitable and calibrated growth,” Kumar reiterated, adding that loan growth would remain aligned with segments that offer healthy returns.

Retail advances were largely flat year-on-year, with the bank deliberately reducing exposure to low-margin segments like new car loans and prime home loans. “It’s a conscious call. You don’t make money in those products,” Kumar said. Kumar added, the bank continues to exercise caution on unsecured retail loans but has started observing improving trends in delinquencies in segments like personal loans and credit cards.

“In retail, we’re not chasing growth for the sake of it. We’re focusing only on those products where the yield-risk trade-off makes sense,” Kumar added.

Asset quality remained steady, with gross NPAs at 1.6 percent and net NPAs at 0.3 percent, even as slippages rose to Rs 1,458 crore, largely from small enterprise and micro-industrial accounts, and some secured mortgage cases. “These were a few isolated accounts already under stress for some time,” he noted. Recoveries and upgrades were at Rs 1,170 crore, including Rs 338 crore from security receipts. “Given that many of the slippages were in secured accounts, we’re not worried about potential losses,” Kumar reassured.

The cost of deposits fell to 5.9 percent, down from 6.1 percent in the previous quarter, aided by a reduction in savings account rates. The overall cost of funds improved by 15 bps, aligning better with declining asset yields amid falling interest rates. “We continue to calibrate deposit growth in line with our loan book and liquidity requirements,” the CFO said.

Capital levels remained robust, with CET1 at 14 percent and overall capital adequacy at 16.5 percent. While the bank has enabling board approvals for a potential capital raise, Kumar made it clear there is no immediate need. “With our current capital position, we do not feel any need for a raise at this point,” he said.

Retail and branch-led deposit mobilisation remained strong, growing 20 percent yearo-on-year “We’ve consciously slowed growth in wholesale deposits due to profitability concerns. Our focus remains on granular, low-cost liabilities,” Kumar said.