SMBC stake remarks unrelated to Yes Bank’s operational priorities, says CEO Prashant Kumar

Yes Bank

Sumitomo Mitsui Banking Corporation’s (SMBC) recent comments on not increasing its stake in the bank should not be linked to Yes Bank’s internal performance or strategy, said CEO of Yes Bank, Prashant Kumar on October 18.

Speaking to Moneycontrol during a media call post Q2 earnings, he said, “SMBC has stated that they will not increase their stake, and they are under no obligation to do so beyond 24.99 percent.”

“Having said that, Yes Bank needs to improve, which we fully acknowledge,” he said.

“We continue to focus on strengthening our net interest margin (NIM) and reducing the cost-to-income ratio. However, these two statements should not be connected.”

The CEO reiterated that the bank remains focused on improving profitability metrics and operational efficiency.

SMBC, which holds a strategic stake in Yes Bank, has not indicated any plans to alter its long-term position in the lender.

Answering another query on asset quality, Kumar said provisioning costs increased to Rs 400 crore in the September quarter from Rs 250 crore maintained in prior periods, primarily due to lower write-backs from earlier corporate resolutions.

“Non-NPA-related provisioning has remained stable, but the decline in right-backs compared to previous quarters led to a higher overall figure,” he said.

“Our NPA-related provisioning reflects the strength of our current portfolio. The trend seen in the September quarter is not expected to continue and we anticipate a reasonable run rate in the December and March quarters.”

Kumar added that the bank’s provisioning trajectory was supported last quarter by a large corporate resolution payout, and the current increase does not indicate fresh stress in the loan book.