Sumitomo Mitsui to invest ₹16,000 crore more in YES Bank after RBI nod

Sumitomo Mitsui's fresh ₹16,000 crore plan follows its earlier ₹13,500 crore deal for 20% in YES Bank, with RBI nod for up to 24.99% ownership

Japanese financial giant Sumitomo Mitsui Banking Corp (SMBC) is set to inject an additional ₹16,000 crore ($1.83 billion) into YES Bank through a mix of equity and debt, according to a report by The Economic Times. The infusion is expected to strengthen the bank’s balance sheet and could mark the beginning of a more significant ownership shift.

 

This follows SMBC’s earlier commitment of ₹13,500 crore for a 20 per cent stake in Yes Bank, largely acquired from existing shareholders led by the State Bank of India (SBI).

 

SMBC exploring full control via subsidiary

SMBC, one of Japan’s top three lenders with operations in 39 countries, is also in the process of setting up a wholly owned subsidiary in India. This entity is expected to be used for acquiring a majority stake in YES Bank, according to sources cited in the report.

 

 

Breakdown of the ₹16,000 crore funding plan

The proposed funding will be structured as follows:

1. ₹8,500 crore via yen-denominated bonds, priced below 2 per cent
2. ₹7,500 crore as equity, likely through foreign currency convertible bonds (FCCBs)

The capital infusion is aimed at boosting YES Bank’s capital adequacy and improving asset quality metrics, enabling further lending growth.

 

Shareholder approval and RBI green light

YES Bank’s shareholders approved the fundraising plan last week. Soon after, the Reserve Bank of India (RBI) granted SMBC permission to increase its stake in the bank to up to 24.99 per cent.

 

Of this, SMBC will initially purchase a 20 per cent stake from domestic banks. The route to the remaining 4.99 per cent is still being finalised, with options including:

• Negotiations with private equity investors Advent International and Carlyle Group
• Subscribing to fresh equity issued by the bank 

Advent and Carlyle currently hold 9.2 per cent and 4.2 per cent in YES Bank through Verventa Holdings and CA Basque Investments, respectively.

 

Capital infusion to improve YES Bank’s NIM

The fresh capital is expected to improve YES Bank’s net interest margin (NIM), which stood at 2.5 per cent in June 2025—among the lowest in the sector. A stronger balance sheet could help reposition the bank for more competitive lending in coming quarters.