YES Bank shares grew by 9% on Monday following word of a significant agreement. SMBC's 20% share purchase in the private lender, worth Rs 13,483 crore, is considered a critical move for the bank. The State Bank of India (SBI), HDFC Bank, ICICI Bank, and other financial institutions will provide the acquisition funds.
YES Bank shares have risen by 8.7% following the deal, finishing at Rs 21.74 on Monday. This rise indicates investors are regaining faith in the bank, having moved past the 52-week low of Rs 16.02.
Experts believe YES Bank will obtain key elements of international banking knowledge and risk handling procedures through this partnership with SMBC. Most analysts consider the deal favourable to both parties because SBI and other participants can profit from their investment in YES Bank. Besides, the capital and expertise provided by YES Bank are expected to help it rebuild its presence in the sector. Tapse, of Mehta Equities, stated that the transaction is likely to be influential, as it offers greater access to overseas funding and stricter governance.
Those changes could support the bank's recovery and enhance its prospects for the future. However, many analysts say that the positive reactions might fade soon. Yuvraj Choudhary from Anand Rathi Institutional Equities explained that even though the deal creates a positive sentiment, it might be a while before YES Bank's financials recover significantly.
YES Bank mentioned a 63.3% rise in net profit to Rs 738.1 crore in its latest quarterly report for the final quarter of FY25. The increase in net interest income by 5.7% over the previous year underscores the bank's increasing financial stability. The bank's NIM reached 2.5%, which signals further improvement in its principal operations.
SBI realised considerable profits after it decided to sell a large part of its shares in YES Bank. SBI invested Rs 410 crore to acquire 41 crore shares, and analysts project that the bank will gain over Rs 4,700 crore from this transaction. The move reflects increasing investor confidence in the banking space, according to Abhishek Jain of Arihant Capital Markets, who believes it may draw more foreign money into Indian banks.