Japanese banking giant Sumitomo Mitsui Banking Corporation is reportedly close to acquiring a significant stake in Yes Bank. As per the reports, talks have been ongoing for months and are now reaching the final stages. If completed, this could become one of India’s biggest banking deals.
According to The Economic Times, SMBC may acquire a 51% stake in Yes Bank. This would make it the largest shareholder and trigger a mandatory open offer for an additional 26%. If this offer goes through, it would be the biggest M&A transaction ever in India’s banking sector.
The development comes after years of restructuring. Yes Bank had a dramatic collapse in 2020, followed by a government-backed rescue led by the Reserve Bank of India (RBI). Since then, the State Bank of India (SBI) has held a 24% stake and has been seeking a long-term strategic investor.
Yes Bank’s performance has improved significantly since the crisis. Deposits have tripled to ₹2.85 lakh crore. Bad loans have declined sharply. Gross NPAs are now at 1.6%, while net NPAs stand at just 0.3%. In FY25, the bank reported a net profit of ₹2,406 crore—up 93% year-on-year. This is a sharp reversal from FY20, when it posted a loss of over ₹16,000 crore.
Despite this progress, regulatory challenges remain. India has strict rules on foreign ownership in private banks. The FDI cap is set at 74%. A single foreign entity cannot hold more than 15%. Even if SMBC gets approval to buy a majority stake, the RBI may restrict voting rights. Current norms allow foreign investors to hold only up to 26% voting power.
Besides SBI, it is still unclear whether other key investors—such as HDFC Bank, ICICI Bank, LIC, and global private equity firms like Carlyle and Advent—will also exit or reduce their holdings.
If the deal goes through, it could mark a new chapter for Yes Bank—and signal growing foreign interest in India’s banking sector.
Disclosure: The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.
