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SMFG to invest $1.1bn more in Yes Bank, raising stake to near 25%

Japan's Sumitomo Mitsui Financial Group is planning a follow-on investment to lift its total commitment to $2.7 billion, signalling deepening confidence in the Indian lender's turnaround.

$2.7 billionTotal SMFG commitment

Banking1 min read

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$1.1 billionFollow-on investment
~25%Target ownership stake

Sumitomo Mitsui Financial Group (SMFG) plans a $1.1 billion follow-on investment in YES BANK across two tranches. The move will raise SMFG's total commitment to $2.7 billion and bring its ownership stake to nearly 25%, just below SEBI's 26% threshold that would trigger a mandatory open offer.

The investment comprises two parts: a $420 million equity acquisition of a 5% stake from Carlyle Group and other minority shareholders, and up to $680 million in convertible bonds to support Yes Bank's growth strategies.

Yes Bank's shares rallied 3.3% to ₹20.65 on the BSE following the announcement, reflecting renewed investor confidence in the bank's revival trajectory since the 2020 RBI-led rescue and reconstruction.

This represents one of the largest foreign bank investments in an Indian private sector bank, underscoring SMFG's conviction in Yes Bank's operational and financial turnaround over the past four years.

Why it matters

For DSAs and lending partners, Yes Bank's strengthened capital base unlocks expanded retail, corporate, and digital lending capacity—directly translating to higher loan distribution opportunities across the network. A well-capitalised Yes Bank means faster disbursals, better product innovation, and more competitive terms for connectors sourcing retail and SME credit.

SMFG's sustained backing signals global financial institutions' appetite for India's banking recovery story. This de-risks Yes Bank as a lending partner and validates the RBI's 2020 intervention, encouraging other foreign investors to deepen ties with Indian lenders and expanding capital availability for the broader DSA-to-NBFC supply chain.

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Finsamudra DeskNewsroom · 16 Jul 2025, 6:00 pm IST
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