Private sector lender Yes Bank is poised to close a major strategic transaction where Japan-based Sumitomo Mitsui Banking Corporation (SMBC) is set to buy a 20 per cent stake in the banking major. Expressing optimism about the future, Prashant Kumar, MD & CEO, Yes Bank, told CNBC TV18, “There has been an overhang on the Bank thus far and there was a need for a strategic partner. This is a significant transaction in Yes Bank’s transformation journey.” He hoped that the entire transaction will be completed by the second quarter of FY26.
SMBC will buy 20 per cent stake in Yes Bank from State Bank of India (SBI) and seven other lenders including Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank and Kotak Mahindra Bank. The transaction will be worth about Rs 13,483 crore and will mark the biggest foreign investment in the country’s banking sector.
The deal, which still requires approvals from the Reserve Bank of India (RBI) and the Competition Commission of India (CCI), will mark a critical turning point for the Bank’s growth narrative. “This sort of an investment will help us leap forward to our second phase of transformation,” Prashant Kumar told CNBC TV18.
He further added, “SMBC’s investment reflects their confidence in the Yes Bank franchise. SMBC is a strategic investor with a long-term strategy to build franchises for the future.”
One of the major implications of the investment from SMBC, he added, is a likely re-rating of the Bank that would “significantly enhance Yes Bank’s ability to secure funding and expand its lending activities”.
“Several corporates and government entities refrain from engaging with banks that lack a minimum credit rating,” he explained, while maintaining that with this partnership, Yes Bank aims to overcome that barrier and position itself as a go-to institution for large-scale deals and government collaborations.
Shares of Yes Bank went up by 2.25 per cent today at 12:10 pm to a trading price of Rs 20.45.