SMBC’s 20% Buyout Bodes Well For Yes Bank

India represents a key market for us, and we see immense long-term potential in its dynamic and fast-growing economy, said Toru Nakashima, President & Group CEO, SMFG, and Akihiro Fukutome, President & CEO, SMBC

Mumbai: Japan’s Sumitomo Mitsui Banking Corp (SMBC) has entered into a definitive agreement on May 9 to acquire 20 per cent stake in Yes Bank through a secondary stake purchase of 13.19 per cent from SBI and 6.81 per cent aggregate stake from other banks for Rs13,483 crore at Rs21.5 per share. The deal could be beneficial for the beaten down Yes Bank stocks.

The other banks include Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank and Kotak Mahindra Bank.

By early 2020, the financial position of Yes Bank had deteriorated as it had been unable to raise capital. This resulted in potential loan losses which in turn led to downgrades and prompted investors to invoke bond covenants and a withdrawal of deposits by customers. On March 5, 2020, the RBI took over Yes Bank in a bailout provision, reconstructed the board and named Prashant Kumar former CFO of SBI as its MD.

The bank has since started to earn profits and was in profit in 2023-24, while in 2024-25 its profits rose by 2.3 per cent over the previous year.

Talking to Bizz Buzz, Anil Kumar Bhansali, head (treasury) and executive director at Finrex Treasury Advisors, says: “It is the largest cross-border investment in the Indian Banking sector.”

Federal Bank will be selling 16.62 crore to SMBC. The SBI will still remain a major shareholder with 10.80 per cent stake. The other banks will be selling 6.81 per cent of their stakes. The deal could be beneficial for the beaten down Yes Bank stock.

The stock has also rebounded strongly from a crucial support level, reinforcing confidence in its stability and near-term upside potential.

Prashant Kumar, Managing Director & Chief Executive Officer, Yes Bank, said: “This investment is a powerful endorsement of our transformation journey and future potential.”

Toru Nakashima, President & Group CEO, SMFG and Akihiro Fukutome, President & Chief Executive Officer, SMBC, said: “India represents a key market for us, and we see immense long-term potential in its dynamic and fast-growing economy.”