Mumbai: Japan’s Sumitomo Mitsui Banking Corp. (SMBC) to acquire 20% stake in Inyes Bank ₹$1.348.2 billion, making it the largest cross-border investment in India’s banking industry.
SMBC to buy at a price with shares of the National Bank of India and other banks that are shareholders ₹2.150, assessing lenders at Mumbai headquarters for $7.9 billion.
“SMBC has entered into a confirmed agreement on May 9, 2025 to purchase 13.19% of its secondary shares from SBI, 20% of its shares from other bank shareholders,” the bank said in a press statement on Friday.
According to two bankers aware of the problem, SMBC will hope to increase its holdings in “is a bank” for some time, eventually triggering an open offer. However, SMBC’s voting rights will be limited to 26%, refusing to be determined according to the RBI regulations.
SMBC will also receive two seats on the Yes Bank board, they said.
Various banks jointly hold 33.74% of Yes Bank’s shares – including SBI (23.99%), 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 as part of the 2020 government engineering rescue, has been seeking to sell its shares on private lenders since its three-year lockdown period ended in 2023.
The sale to SMBC shares paved the way for SBI to export, and other lenders who saved Yes Bank five years ago. The deal also introduces a new owner who can help India’s sixth largest private lender compete better with agile competitors.
MINT first reported on May 6 that MBC has obtained RBI approval for its acquisition of 51% of Yes Bank. Japanese lenders have proposed to Yes Bank for about a year. Last August, SMBC’s global CEO Akihiro Fukutome met with RBI and SBI officials to discuss buying shares at Yes Bank, a global competition for Mumbai lenders.
SMBC’s Indian subsidiary
According to the above-mentioned bankers, Japanese conglomerates will seek permission from the Reserve Bank of India to establish a wholly-owned subsidiary in India. MINT reported that the Reserve Bank of India is pushing SMBC to set up a domestic subsidiary to make its Indian business sound from Japanese parents.
According to the bank, SMBC can create a merger of its wholly-owned non-bank financial company SMFG Credit India and a wholly-owned subsidiary. It is not clear whether SMBC will retain its brand after gaining control of the bank.
Yes Bank is advised by Citigroup Global Market Private. Limited serves as its financial advisor and as legal counsel for AZB& Partners. Financial advisors JP Morgan and Jefferies and legal advisors J. Sagar Associates (JSA) and Anderson Mori & Tomotsune advised SMBC.
SMBC is a wholly owned subsidiary of Sumitomo Mitsui Financial Group Inc. (SMFG), the second largest banking group in Japan, with total assets of $2 trillion as of December, in addition to having a strong global business.
“We anticipate their global expertise and advanced governance standards. This investment is a strong recognition of our transformation journey and future potential,” said Prashant Kumar, managing director and CEO of Yes Bank, in a statement. “Over the past few years, our growth has been strongly supported by SBI and will continue to maintain valuable stakeholders.”
India represents the main markets of Japanese lenders who see “long-term potential in its dynamic and fast-growing economy,” said SMFG President and Group CEO Toru Nakashima and SMBC President and CEO Akihiro Fukutome in a statement on Friday.
The Indian ambitions of the Bank of Japan
SMBC started its Indian operations in 2013, operating in foreign banks in New Delhi, Mumbai and Chennai. The Japanese conglomerate has been following a bank in India for several years.
In 2010, Japanese lenders acquired a 4.5% stake in Kotak Mahindra Bank, which gradually sold until it fully exited in March this year. In 2021, SMBC acquired a 74.9% stake in Fullerton India, and then increased its stake to 100% of the non-bank financing company.
According to the aforementioned bankers, yes, banks will benefit from the strong credit rating of SMBC’s A1/A-(stable) which will have an impact on the cost of capital for Indian lenders.
SMBC’s entries are also expected to bring much-needed improvements to Yes Bank’s retail business, which has undergone major revamps over the past year. Yes, banks are also experiencing a drought, laying off at least 500 employees and asking four senior officials to step down.
In the fourth quarter of 2024-25, Yes Bank reported a 64% year-on-year increase in net profits. ₹As of the end of March, the capital adequacy ratio of US$73.812 billion was 15.6%.
