Yes Bank Shares Sluggish Despite SMBC Stake: Why No Rally?

• Sumitomo Mitsui Banking Corporation (SMBC) acquired a 24.2% stake in Yes Bank, yet shares remain sluggish around Rs 21.5, the deal price.
• Despite improved fundamentals and a positive outlook post-SMBC deal, slow profit growth and a difficult path to achieving 1% Return on Asset (RoA) deter investors.
• Deposit growth is higher than advances, improving the Credit-Deposit (CD) ratio to 84%, indicating good potential for future credit growth.
• Credit growth stood at 6.4% year-on-year, with the bank expecting double-digit growth for the full year and targeting a 3.25-3.3% Net Interest Margin (NIM).
• Yes Bank plans to leverage its relationship with SMBC for transaction banking and corporate access; a rally depends on RoA achievement and SMBC synergy.

Why It Matters: Yes Bank shares remain subdued despite SMBC's stake, awaiting better profit growth and RoA.