Sumitomo Mitsui Banking Corporate N.A. (SMBC) has received approval from the Competition Commission of India (CCI) to acquire up to 24.99% of the shares of Yes Bank Limited with conditions. Under the approval, the Japanese lender will become the bank's biggest shareholder in the private sector.
SMBC Bank is a subsidiary of Sumitomo Mitsui Financial Group (SMFG), the second-largest bank in the world. By December 2024, SMFG's total assets accounted for almost 2 trillion. This firm operates in different markets across the globe and reaches India through its non-banking financial institution, SMFG India Credit Company.
The regulator indicated that the proposal entails SMBC purchasing share capital and voting rights in Yes Bank. The CCI's approval has allowed the transaction to be completed without any regulatory barriers.
The bank had previously announced that SMBC would gain 20% by buying a secondary stake. It consists of 13.19% of the State Bank of India (SBI) and 6.81% of seven other lenders, including ICICI Bank, Axis Bank, HDFC Bank, Kotak Mahindra Bank, Bandhan Bank, IDFC First Bank, and Federal Bank. In this deal, SBI will have a reduced stake in Yes Bank, currently 24% to a little more than 10%.
The Japanese lender will increase its ownership to 24.99 shares, depending on how the deal proceeds. Although SMBC has the most significant stake, it will not be considered a promoter of Yes Bank. The RBI explained this decision during its approval. The sale of its stake continues the restructuring process that started in March 2020, when SBI and an association of banks rescued Yes Bank from its financial troubles.
In the fourth quarter ending March 2025, Yes Bank posted that its net profit increased by 63% to 738 crore, compared to 451.9 crore in the previous year. On a full-year basis, net profit increased more than twofold to 2,406 crore in FY25, compared to 1,251 crore in FY24.
Yes Bank's balance sheet consolidation through the foreign capital of SMBC paves the way for long-term growth opportunities for the manufacturing sector lender in the Indian market.