State Bank of India will divest its 13.19% stake in private lender Yes Bank Ltd. to Japanese financial giant Sumitomo Mitsui Banking Corp. for nearly Rs 8,890 crore.
The board on Friday approved the plan to sell 413 crore shares at Rs 21.5 apiece, subject to receipt of all regulatory and statutory approvals by the acquirer, according to an exchange filing.
In a separate exchange filing, Yes Bank said that SMBC will acquire an additional 6.81% stake in the lender from other lenders who hold stake. This will bring SMBC’s stake in Yes Bank to 20%.
The other lenders selling stake to SMBC include HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, IDFC First Bank, Federal Bank and Bandhan Bank. The Japanese banking company would be buying 213.68 crore shares held by these lenders. At Rs 21.5 per share, that amounts to Rs 4,594 crore.
This takes the total investment to be made by SMBC in Yes Bank to around Rs 13,484 crore.
SBI, India’s largest lender, said that the sale would be concluded within 12 months of the date of execution of the deal. As such, a nod from Reserve Bank of India is required for such a sale. RBI only allows an investor to buy up to 4.99% stake in a private bank without express regulatory approvals.
For stake up to 10% in a private bank, a specific approval is needed. For any further stake purchase, the investor must go through a fit and proper assessment by the regulator.
Yes Bank’s stake has been a hot topic of discussion since SBI had led the effort to save the lender when it underwent severe financial stress in March 2020. SBI led a consortium of 10 lenders who infused Rs 10,000 crore worth equity stake in Yes Bank to stabilise its operations.
While SBI originally held 40% stake, its holding in Yes Bank has since dropped to nearly 24%.
This sale is expected to be the first step in a long process through which SMBC will likely control majority stake in Yes Bank. According to a person with direct control of the matter, SMBC will likely look at raising its stake in Yes Bank through multiple means, one of which could include the merger of SMFG India Credit into Yes Bank.
SMFG India Credit (formerly known as Fullerton India), is an India-based non-bank finance company, where the Japanese investor holds majority stake. As of Dec. 31, SMFG India Credit had assets under management worth RS 53,100 crore. It had a capital adequacy ratio of 23.9% and net non-performing asset ratio of 1.4%.
Queries mailed to SMFG India Credit did not immediately yield a response.
Yes Bank reported total advances worth Rs 2.46 lakh crore, and deposits worth Rs 2.84 lakh crore in the quarter ended March 2025. It had a capital adequacy ratio of 15.6% as of March 31, with a common equity Tier-1 capital ratio of 12.2%. Gross NPA ratio for the bank stood at 1.6% and net NPA ratio was 0.3%.
