Japan's SMBC to pump ₹16,000 crore into Yes Bank, eyes larger stake: Report

Japan’s Sumitomo Mitsui Banking Corp (SMBC) is reportedly set to invest ₹16,000 crore in Yes Bank through a mix of yen-denominated bonds and equity instruments, including foreign currency convertible bonds. Japan’s Sumitomo Mitsui Banking Corp (SMBC) plans to invest ₹16,000 crore ($1.83 billion) in Yes Bank through a mix of equity and debt, the Economic Times reported on Friday, citing people familiar with the matter. The proposed funding is aimed at strengthening the private lender’s balance sheet and could pave the way for SMBC to take an ownership stake, the report said. The move comes on top of ₹13,500 crore that SMBC has agreed to pay existing shareholders, led by State Bank of India, for a 20% stake in Yes Bank, according to ET. Of the fresh infusion, about ₹8,500 crore will come via yen-denominated bonds priced below 2%, and ₹7,500 crore through equity, likely in the form of foreign currency convertible bonds, the paper said. Yes Bank shareholders approved the fundraise last week, while Reserve Bank of India (RBI) has already cleared SMBC to acquire as much as 24.99% in the lender. The Japanese bank has yet to decide how it will raise its stake beyond the agreed 20%, the report added. Yes Bank, once controlled by co-founder Rana Kapoor, has seen private equity firms Advent International and Carlyle Group emerge as key shareholders following a bailout in 2020. The Reserve Bank of India has not granted SMBC “promoter” status, which would give it greater influence over the bank’s operations. Yes Bank’s net interest margin was 2.5% as of June 2025, among the lowest in India’s banking sector. The private sector lender reported net profit of ₹801 crore in the first quarter of FY 2025-26, marking an increase of 60% from ₹502 crore in the same period last year. Its net interest income or the difference between interest earned on loans and expended on deposits rose 6% to ₹2,371 crore as against ₹2,244 crore in the year-ago period. The bank's provisions came down by 11% sequentially to ₹284 crore in June quarter from ₹318 crore in the previous quarter.