Japan’s SMBC to Raise Stake in Yes Bank, Buys 4.2% from Carlyle Group

This latest transaction follows SMBC’s previously announced plan to buy a 20% equity stake in Yes Bank from State Bank of India (SBI) and seven private lenders for about ₹13,483 crore, as per The Economic Times report.

With the fresh purchase, SMBC’s total holding in Yes Bank inches closer to the regulatory cap of 24.99%, for which the Reserve Bank of India (RBI) has already granted approval.

SBI Reduces Holding Further

As part of the restructuring journey that began in 2020, SBI has steadily reduced its stake in Yes Bank. In the latest move, SBI sold a 13.18% stake equivalent to 413.44 crore shares at ₹21.50 per share to SMBC, totalling nearly ₹8,889 crore.

Approvals from the RBI and the Competition Commission of India (CCI) earlier this year cleared the way for this divestment.

With SMBC’s expanded role, the Japanese lender will also gain the right to nominate 2 non-executive directors to Yes Bank’s board, signalling greater involvement in strategic decision-making.

Strategic Portfolio Reallocation in India

Parallel to its Yes Bank expansion, SMBC’s parent group, Sumitomo Mitsui Financial Group (SMFG), announced the sale of its 1.65% stake in Kotak Mahindra Bank for JPY 106 billion. The exit generated significant stock gains of JPY 94 billion and improved SMFG’s Common Equity Tier 1 (CET1) ratio by 7 basis points.

Despite the sale, SMFG emphasised that its business partnership with Kotak Mahindra Bank will continue, particularly in wealth management and investment banking a collaboration that has been in place since 2010.

Conclusion

SMBC’s increased stake in Yes Bank reflects a measured approach to strengthening its presence in India’s banking sector while maintaining strategic flexibility. 

By gradually expanding its holding, SMBC positions itself to play a more active role in Yes Bank’s governance, while portfolio adjustments such as the Kotak Mahindra Bank exit help optimise capital and risk. Overall, these moves indicate a balanced strategy of growth and risk management in the Indian financial market.

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