MUMBAI: In a significant reshuffling of Yes Bank’s ownership, three Indian lenders — State Bank of India (SBI), Federal Bank, and Bandhan Bank — have offloaded part of their stakes in the private sector bank to Japan’s Sumitomo Mitsui Banking Corporation (SMBC), in transactions collectively worth over Rs15,800 crore.
These banks have booked more than 100 per cent gains on their investmenton a per-share basis, because: they had acquired these shares in 2020 at Rs10 and sold now at Rs21.50 per shares.
The deal, among the largest cross-border banking transactions in India, marks a strategic exit for the domestic banks that had invested in Yes Bank during its 2020 rescue, and a major entry point for SMBC into the Indian banking sector.
SBI sells over half its holding
SBI, which led the 2020 bailout of Yes Bank, sold 413.44 crore shares, reducing its holding from 24 per cent to approximately 10.81 per cent. The shares were sold at Rs21.50 apiece, fetching the country’s largest lender around Rs8,889 crore.
SBI had originally acquired its stake at Rs10 per share, meaning it has booked a significant notional gain to the tune of Rs4,755 crore from the deal. The sale was approved by the Reserve Bank of India (RBI) on August 22 and by the Competition Commission of India on September 2. SBI’s board had cleared the move back in May 2025.
Federal Bank, Bandhan Bank exit partially
Federal Bank sold 16.62 crore SMBC shares, also at Rs21.50 per share, reducing its stake from 1.01 per cent to 0.43 per cent, whereas Bandhan Bank offloaded 15.39 crore shares, trimming its holding from 0.70 per cent to 0.21 per cent.
Both banks had invested in Yes Bank at the time of its restructuring in March 2020, when a group of eight lenders — led by SBI — stepped in to stabilise the bank. Those shares were also acquired at ₹10 each, indicating gains on sale for both banks.
Strategic exit
The partial divestments reflect a strategic decision by the original rescuers of Yes Bank to book profits and reallocate capital, as the bank has now moved past its critical phase. Yes Bank’s performance has gradually stabilised since 2020, with improvements in asset quality, capital ratios, and governance.
SBI Chairman Challa Sreenivasulu Setty called the transaction a successful example of collaborative resolution, and welcomed SMBC as a long-term strategic partner. “This is perhaps the best example of protecting the customer interests of a large bank by collaborative efforts of SBI and other banks under the guidance of the Government of India and RBI,” he said.
SMBC’s long-term play
For SMBC, a unit of the Sumitomo Mitsui Financial Group, the acquisition marks a substantial strategic investment in India’s banking sector. The Japanese lender now has regulatory approval to increase its stake in Yes Bank up to 24.99 per cent, and has secured rights to nominate two directors on the Yes Bank board.
Reports suggest SMBC may follow up the stake purchase with an additional capital infusion of up to Rs16,000 crore, through a combination of equity and debt instruments.
Shareholding shift
The transaction signals a broader shift in Yes Bank’s shareholding structure — from an Indian-led rescue consortium to a strategic foreign investor with long-term ambitions in India’s high-growth financial market.
As part of the original 2020 rescue deal, eight Indian banks had collectively infused over Rs10,000 crore into Yes Bank at Rs10 per share. With SBI now selling more than half its holding and other banks trimming stakes, SMBC is set to emerge as the largest single shareholder if it exercises its full investment potential.
