SMBC receives RBI approval for 25% stake in Yes Bank
What's the story
The Reserve Bank of India (RBI) has approved Sumitomo Mitsui Banking Corporation (SMBC) to acquire up to 24.99% of Yes Bank's paid-up share capital and voting rights. The approval, issued on August 22, is valid for one year and clarifies that SMBC will not be classified as a promoter. This transaction is subject to approval from the Competition Commission of India (CCI) and other customary conditions.
Deal details
Deal to make it the largest foreign investment in India
The deal will see SMBC acquire a 20% stake, 13.19% from State Bank of India and 6.81% from a consortium of private banks. The investment, estimated at around $1.6 billion, will be the biggest foreign investment in an Indian bank. After the transaction, SBI will hold approximately 10.2%, while SMBC will get two board seats on Yes Bank's board.
Growth trajectory
Yes Bank's financials as of June 2025
As of June 2025, Yes Bank's capital adequacy ratio stood at 16.2% with Tier I capital at 14%. The bank's net NPAs, net security receipts, and restructured assets made up only 0.5% of advances while gross NPAs improved to 1.6% from 16.8% in FY20. The provision coverage ratio was at a healthy 80%. The bank is now focused on retail and SME lending which accounted for some 60% of advances in FY25 as against just about a third in FY20.