SMBC's Yes Bank Deal: Only One SBI Director To Stay As Japanese Giant Gains Board Power
Another SBI-nominated director will be resigning immediately once the transaction is closed.
Only one State Bank of India-nominated director will remain on the board of Yes Bank, following its acquisition by Sumitomo Mitsui Banking Corp, according to an investor presentation made by the acquired lender on Wednesday.
Another SBI-nominated director will be resigning immediately once the transaction is closed, it added.
On May 9, Yes Bank had announced that SMBC would acquire the 20% stake from its shareholders, including SBI and several Indian lenders such as HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, IDFC First Bank, Federal Bank and Bandhan Bank. These lenders had participated in the private lender's restructuring plan in 2020.
SBI will divest its 13.19% stake in the private lender for nearly Rs 8,890 crore and other lenders will cumulatively sell 6.81% stake in Yes Bank to SMBC, taking the latter's stake to 20%.
This takes the total investment to be made by SMBC in Yes Bank to around Rs 13,484 crore.
With this deal, SMBC can nominate two non-executive directors to Yes Bank's board to support its governance and strategy with a 20% stake.
Appointment of the board of directors will be subject to shareholders' nod and the Reserve Bank of India's approval, apart from their meeting the stipulated criterias. The Japanese lender will also have pre-emptive right to maintain its pro-rata stake in any future capital raising.
Post the transaction, SMBC will become the largest stakeholder in Yes Bank at 20%, followed by SBI at 10.8% and other investor banks at 2.9%.
According to SBI, the sale would be concluded within 12 months of the date of execution of the deal.
This deal will benefit Yes Bank with better credit rating, brand reputation and global governance standards of SMBC, according to the investor presentation.
While the transaction will help the bank drive the next phase of growth, profitability and value creation, there will also be a continued parentage of SBI, it noted.
The acquisition by SMBC will provide the private sector lender with cross-border expertise and help unlock new business opportunities such as access to Japanese and global corporates.
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.
In the quarter ended March 2025, Yes Bank reported total advances worth Rs 2.46 lakh crore, and deposits worth Rs 2.84 lakh crore. It had a capital adequacy ratio of 15.6%, with a common equity Tier-1 capital ratio of 12.2%. The lender's gross non-performing assets ratio stood at 1.6% and net NPA ratio was at 0.3%.
