Sumitomo Mitsui to reportedly inject $1.8bn into India’s Yes Bank

Japanese financial institution Sumitomo Mitsui Banking (SMBC) is poised to invest an additional Rs160bn ($1.83bn) in Yes Bank, reported The Economic Times.

This capital infusion, which will be a combination of equity and debt, is anticipated to enhance the bank's financial standing and may signal a shift in ownership dynamics.

This latest investment follows SMBC's prior commitment of Rs135bn for a 20% stake in Yes Bank, primarily acquired from existing shareholders, including the State Bank of India (SBI).

SMBC is also in the process of establishing a wholly owned subsidiary in India, which is expected to facilitate the acquisition of a majority stake in Yes Bank, according to sources referenced in the report.

The funding plan is structured to include Rs85bn through yen-denominated bonds, which are expected to be priced below 2%, and Rs75bn as equity, likely via foreign currency convertible bonds (FCCBs).

This capital infusion is aimed at bolstering Yes Bank's capital adequacy and enhance asset quality metrics.

Recently, Yes Bank's shareholders approved the fundraising initiative, and shortly thereafter, the Reserve Bank of India (RBI) granted SMBC the green light to increase its stake in the bank to a maximum of 24.99%.

SMBC plans to acquire a 20% stake from domestic banks, while discussions are ongoing regarding the acquisition of an additional 4.99%.

Potential strategies for this include negotiations with private equity firms Advent International and Carlyle Group, as well as subscribing to new equity issued by the bank.

Advent and Carlyle currently own 9.2% and 4.2% of Yes Bank, respectively, through Verventa Holdings and CA Basque Investments.

The anticipated capital infusion is expected to enhance Yes Bank's net interest margin (NIM), which was reported at 2.5% in June 2025.

"Sumitomo Mitsui to reportedly inject $1.8bn into India’s Yes Bank" was originally created and published by Retail Banker International, a GlobalData owned brand.

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