Japan’s SMBC To Acquire 20% Stake in Yes Bank from SBI, 7 Other Banks To Become Largest Shareholder

Moneylife Digital Team 09 May 2025

Economy & Nation

In a landmark cross-border investment, Japan’s Sumitomo Mitsui Banking Corporation (SMBC) has entered into a definitive agreement to acquire a 20% stake in Yes Bank, becoming the Indian lender’s largest shareholder. The deal, involving a combination of secondary stake purchases, marks a pivotal development in Yes Bank’s turnaround and future growth strategy.

The acquisition includes a 13.19% stake from State Bank of India (SBI) and a 6.81% stake from a consortium of seven Indian banks, namely Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank. These investor banks, along with SBI, had infused capital into Yes Bank in March 2020 under the RBI-led reconstruction scheme following the Bank’s near-collapse.

Post-transaction, SBI will continue to retain a stake of over 10%, ensuring its position as a major shareholder, while SMBC emerges as the single largest stakeholder in the private sector lender. The agreement is subject to regulatory approvals from the Reserve Bank of India (RBI) and the competition commission of India (CCI), along with other customary closing conditions.

This deal represents the largest cross-border investment in India’s banking sector to date. SMBC is a wholly-owned subsidiary of Sumitomo Mitsui Financial Group (SMFG), Japan’s second-largest banking group with global assets totalling about US$2trn (trillion). SMFG is publicly listed in Japan and the US and enjoys a robust investment-grade credit rating, including A1 by Moody’s and A- by S&P.

SMBC already maintains a strong presence in India through its banking operations and its non-banking finance company (NBFC) arm, SMFG India Credit Company Ltd.

Yes Bank described the transaction as a strategic milestone and a strong endorsement of the bank’s transformation journey since 2020. “We are excited to welcome SMBC… as a major shareholder whose investment marks a pivotal step in our next phase of growth,” said Prashant Kumar, managing director and cheif executive officer (MD&CEO) of Yes Bank. He also acknowledged SBI’s crucial role in the bank’s recovery, noting that it will remain a valued stakeholder.

SMFG president & group CEO Toru Nakashima and SMBC CEO Akihiro Fukutome expressed confidence in India’s long-term growth potential, stating that the investment aligns with SMBC’s commitment to building enduring, value-driven partnerships in the region. “We see immense long-term potential in India’s dynamic and fast-growing economy,” they said.

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