Japan’s Sumitomo Mitsui Banking Corporation (SMBC) will acquire a 20% stake in Yes Bank for ₹13,482 crore, marking the largest cross-border investment in India’s banking sector to date.
SMBC will purchase shares from the State Bank of India (SBI) and other shareholders at ₹21.50 apiece, valuing the Mumbai-based private lender at approximately $7.9 billion.
SMBC is a wholly owned subsidiary of Sumitomo Mitsui Financial Group Inc. (SMFG), Japan’s second-largest banking group, with global assets totalling $2 trillion as of December 2024.
“Yes Bank entered into a definitive agreement on May 9 for a 20% stake sale to SMBC through a secondary transaction—13.19% from SBI and a combined 6.81% from other banking shareholders,” the bank said in a press release on Friday.
According to two bankers familiar with the matter, SMBC plans to gradually increase its holding in Yes Bank, potentially triggering an open offer for additional shares. However, its voting rights will be capped at 26% in line with Reserve Bank of India (RBI) regulations, they added, speaking on condition of anonymity. As part of the agreement, SMBC will also secure two seats on Yes Bank’s board.
Currently, a consortium of banks holds a 33.74% stake in Yes Bank, with SBI owning 23.99%, followed by HDFC Bank (2.75%), ICICI Bank (2.39%), Kotak Mahindra Bank (1.21%) and Axis Bank (1.01%).
SBI, which acquired a 49% stake in Yes Bank during a government-led rescue in 2020, has been seeking to divest its holding since the end of a three-year lock-in period in 2023.
The sale to SMBC paves the way for SBI and other rescuing banks to exit, while ushering in a new strategic investor capable of enhancing the competitiveness of India’s sixth-largest private lender.
SMBC received RBI’s approval to acquire up to 51% in Yes Bank. The Japanese lender has shown interest in Yes Bank for over a year. In August 2024, SMBC’s global CEO Akihiro Fukutome met with officials from RBI and SBI to explore the acquisition amid a growing international interest in the bank.
Bankers also indicated that SMBC intends to seek RBI’s approval to establish a wholly owned subsidiary in India. The central bank has reportedly encouraged the Japanese lender to set up a local unit to ringfence Indian operations from its Japanese parent.
There is also the possibility that SMBC could consolidate its Indian non-banking arm, SMFG India Credit, with the proposed subsidiary and potentially with Yes Bank. It remains unclear whether the Yes Bank brand will be retained following the acquisition of a controlling stake.
Yes Bank was advised by Citigroup Global Markets as financial adviser and AZB & Partners as legal counsel. SMBC was represented by financial advisers J.P. Morgan and Jefferies, and legal advisers J. Sagar Associates and Anderson Mori & Tomotsune.
“We expect to benefit from SMBC’s global expertise and governance standards. This investment is a strong endorsement of our transformation journey and future growth,” said Prashant Kumar, managing director and CEO of Yes Bank. “SBI has been an invaluable partner, and we’re grateful for their continued support.”
Toru Nakashima, president and group CEO of SMFG, and Akihiro Fukutome, president and CEO of SMBC, said in a joint statement that India represents a critical market for the Japanese group, offering “immense long-term potential in its dynamic and fast-growing economy”.
SMBC commenced operations in India in 2013 and currently operates as a foreign bank with branches in New Delhi, Mumbai and Chennai. Its interest in acquiring an Indian bank has been longstanding.
Back in 2010, SMBC acquired a 4.5% stake in Kotak Mahindra Bank, which it later fully exited in March 2025. In 2021, the Japanese lender acquired 74.9% in Fullerton India, eventually raising its stake to 100% in the non-banking finance company.
According to the bankers cited earlier, Yes Bank stands to benefit from SMBC’s high credit rating (A1 / A- Stable), which could help reduce the Indian lender’s cost of funds.
SMBC’s involvement is also expected to strengthen Yes Bank’s retail banking operations, which have undergone major restructuring over the past year. The bank has recently laid off at least 500 employees and asked four senior executives to step down as part of ongoing reforms.
For the quarter ending March 2025, Yes Bank reported a 64% year-on-year rise in net profit to ₹738.12 crore. Its capital adequacy ratio stood at 15.6%.
