New Delhi: Following months of negotiations, Japan-based Sumitomo Mitsui Banking Corporation (SMBC) is all set to acquire a significant stake in Yes Bank from SBI.
According to reports, SBI aims to sell about 20 percent of its 23.97 percent controlling stake in the company. There have been significant changes to the deal since talks commenced in 2024, and SMBC is likely to raise its stake to 51 percent eventually. It is also widely expected that the company will infuse fresh capital to the tune of 5-7 percent of its value.
Other investors in Yes Bank, including Axis Bank, Kotak Mahindra Bank, ICICI Bank and HDFC Bank and private equity funds like Advent International and Carlyle are also expected to sell their stakes in an open offer by SMBC. Collectively, they hold about 23.4 percent stake in the company. LIC also holds 3.98 per cent in the bank, which has risen to become India’s sixth-largest private bank after its inception in 2003.
If these reports are true, this would be SMBC’s most significant investment in India, surpassing its 74.9% purchase of lender Fullerton India Credit in 2021.
Many foreign institutions have explored the possibility of investing in Yes Bank, including Emirates NBD, and Japan’s Mizuho and MUFG. Still, SMBC’s engagement is seen as the most serious attempt yet.
Though the RBI has capped foreign ownership in banks to 74%, it has allowed case-by-case exemptions, and reports suggest SMBC has received assurances to protect its interests.
Yes Bank has seen its net profits rise by 59% in FY 2025 from Rs. 4,673 million a year ago to Rs. 7,446 million today. Its revenue has also grown by 21% in the same period. Once on the brink of collapse, Yes Bank has seen a remarkable turnaround, with deposits surging to Rs. 2.85 lakh crore by 2025, three times the value from 2020, when SBI was bought in to rescue the bank.
Shares of Yes Bank rose by 10% on the bourses on May 5, mostly attributed to reports of this news.
