Yes Bank clarifies on ‘stake sale’ report, calls it ‘factually incorrect’; stock up 2.5%

Yes Bank share price rose about 2.5% on Tuesday's session after the most prominent private lender explained that the news regarding the sale of the 51% interest is solely speculative and is factually incorrect.

“In this regard, the Bank would like to clarify that the contents of the said article are factually incorrect and purely speculative in nature. Reserve Bank of India (RBI) has not given any in principle approval as stated in the article and this clarification is issued by the Company voluntarily to dispel the baseless media article,” the private bank said in an exchange filing.

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A media reportstated that the RBI had granted its in-principle clearance for up to 51% of Yes Bank's shares to be purchased by a suitable new promoter, beyond the 26% maximum on promoter holdings permitted by banking regulations in the regular course of business, according to a CNBC-TV18 news report.

According to the report, the country's sixth-biggest private bank by assets may be valued at $10 billion or more upon sale, making it the largest acquisition in the banking industry in India.

Yes Bank and its major shareholders received a preliminary nod from the central bank recently. According to the report, the RBI usually limits promoter holdings in domestic banks at 26%, making this move noteworthy.

On Tuesday, the Yes Bank share price opened at ₹26.09 apiece on the BSE; the stock touched an intraday high of ₹26.39 and an intraday low of ₹25.75 apiece.

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“This has been an underperforming stock, but since last week it has gained traction. The short-term outlook for the stock is positive, and we can expect upside towards 28–30 in the near term. 25 is immediate support,” said Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One.

For the March quarter of 2023–2024, Yes Bank had an over twofold rise in standalone net profit of ₹452 crore, mostly as a result of favourable provisions. In the same period last year, the bank made ₹202.43 crore in profit.

The private sector lender benefited from write-backs on income taxes and interest on income tax returns; nevertheless, according to its management, its revenues were constrained by its failure to adhere to the necessary conditions for priority sector lending (PSL). It recorded a 74% increase in net profit at ₹1,251 crore for the fiscal year 2023–2024.

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Because the net interest margin shrank to 2.4% from 2.8% in the same time last year, the core net interest income for the March quarter increased by just 2.3% to ₹2,153 crore.

A meeting of board of directors of Yes Bank will be held on Saturday, July 20, to consider and approve the un-audited standalone and consolidated financial results of the bank for the Quarter (Q1) ended June 30, 2024.

Also Read: Three private banks pare stake in Yes Bank within 14 days of investing

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