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Japanese banking major Sumitomo Mitsui Banking Corp (SMBC) is set to inject Rs 16,000 crore ($1.83 billion) into Yes Bank
Yes Bank SMBC Deal
Japanese banking major Sumitomo Mitsui Banking Corp (SMBC) is set to inject Rs 16,000 crore ($1.83 billion) into Yes Bank through a mix of equity and debt, The Economic Times reported, quoting sources. The planned infusion is aimed at strengthening Yes Bank’s balance sheet and could pave the way for SMBC eventually taking an ownership role.
This funding will come on top of the Rs 13,500 crore that SMBC has already committed to pay existing shareholders — led by State Bank of India (SBI) — for acquiring a 20% stake in the private lender, the report said.
SMBC, one of Japan’s top three banks with operations across 39 countries, is also in the process of setting up a wholly owned subsidiary to acquire a majority stake in Yes Bank. While the Rs 16,000 crore infusion will go directly into Yes Bank’s books, the Rs 13,500 crore will be paid to investors to facilitate their exit.
Of the proposed capital, Rs 8,500 crore will be raised via low-cost, long-term yen-denominated bonds priced below 2%, which is expected to significantly lower Yes Bank’s borrowing costs. Another Rs 7,500 crore will be infused as equity, likely through foreign currency convertible bonds (FCCBs).
Yes Bank’s shareholders cleared the capital raise last week, while SMBC has received RBI approval to acquire up to 24.99% stake in the lender. Of this, 20% will come from domestic banks, while the Japanese lender is still weighing how to raise the remaining 4.99% — either by negotiating with private equity investors Advent and Carlyle or by subscribing to fresh equity issuance.
RBI has not yet granted SMBC promoter status, which the Japanese bank is keen to secure, according to reports.
The capital infusion and low-cost funding are expected to help Yes Bank improve its net interest margin (NIM), which at 2.5% in June 2025 remains one of the lowest in the sector, the reports said.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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