Synopsis:
With SMBC now the largest shareholder and two nominees on the board, Yes Bank is entering a transformative phase. Strengthened governance, upgraded credit ratings, and renewed investor confidence set the stage but how far can the bank leverage this momentum to redefine India–Japan banking flows and accelerate growth?
YES Bank, a notable name in India’s private banking sector, has entered a new chapter with the completion of a landmark cross-border investment by Japan’s Sumitomo Mitsui Banking Corporation (SMBC).
The deal, positioning SMBC as the largest shareholder, underscores renewed investor confidence in the bank’s governance and growth trajectory. After years of navigating a challenging post-crisis recovery, the move is seen as a catalyst for strengthening capital, enhancing corporate governance, and facilitating international banking flows, particularly between India and Japan.
Yes Bank, currently valued at a market capitalization of Rs. 66,788.56 crore, opened at Rs. 21.08, touched a high of Rs. 21.45, up from the previous close of Rs. 21.04, marking an intraday increase of approximately 1.94 percent. The stock’s upward movement reflects optimism around the SMBC acquisition and the potential for strategic collaborations driving the bank’s next growth phase.
Revival After a Crisis
Yes Bank’s near-collapse in 2020 was primarily driven by risky lending practices, poor governance, and regulatory delays. Under former CEO Rana Kapoor, the bank extended substantial credit to high-risk entities, including IL&FS, DHFL, Jet Airways, and Cox & Kings. Defaults by these borrowers sharply increased non-performing assets (NPAs), severely weakening the bank’s financial health.
Compounding the crisis, the bank had reportedly underreported bad loans, masking the severity of its exposure. Governance lapses and allegations of financial misconduct further eroded confidence, while delayed regulatory intervention led to a liquidity crunch. Gross NPAs, which peaked at 16.80 percent in 2019-20, have since declined dramatically to 1.6 percent in FY24-25, reflecting significant cleanup and restructuring.
Strategic Stake Acquisition by SMBC
In a major development, SMBC has completed the acquisition of a 20 percent stake in Yes Bank through a secondary purchase of shares from the State Bank of India (SBI) and other investors who participated in the 2020 reconstruction plan.
This makes SMBC the largest shareholder, while SBI remains a significant investor with more than 10 percent holding. The transaction also brings two SMBC nominee directors onto Yes Bank’s Board, enhancing governance and paving the way for strategic collaboration.
The deal represents the largest cross-border investment in an Indian private sector bank. Leveraging SMBC’s global network, part of Sumitomo Mitsui Financial Group with an approximate USD 2 trillion balance sheet, and SBI’s domestic strength, Yes Bank is positioned to accelerate growth across corporate banking, treasury services, and cross-border solutions, particularly facilitating Japan–India trade and investment.
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Management Commentary
In a statement, Mr. Prashant Kumar, Managing Director & CEO of Yes Bank, said: “The completion of this transaction is a defining moment for YES Bank. We are privileged to welcome SMBC as our largest shareholder and Board participant.
I would also like to express my deepest gratitude to the Ministry of Finance, Government of India, the RBI and SBI for their unwavering support and guidance, and to the other bank investors for their timely capital participation in 2020 and continued support.
My heartfelt appreciation goes to our employees, who navigated through testing times, including the Covid-19 pandemic, and build the YES Bank of Today on the foundation of resilience and trust.
With the combined sponsorship of SMBC, backed by SMFG’s global scale, and SBI, India’s most trusted bank, YES Bank is uniquely positioned to grow stronger, expand Japan–India business flows, and deliver long-term value for all stakeholders.”
Strengthened Governance and Ratings
Following the SMBC stake acquisition, Yes Bank has also received upgrades from all four domestic credit rating agencies-CRISIL, ICRA, India Ratings, and CARE to AA–, the highest rating since the 2020 bailout.
These upgrades reflect the bank’s improved capital position, governance standards, and overall business performance, signaling robust resilience and a clear path for growth.
Future Outlook
Looking ahead, Yes Bank appears well-positioned to consolidate its gains and capitalize on strategic opportunities. With SMBC’s global expertise and SBI’s domestic strength, the bank is expected to further enhance corporate banking, treasury operations, and cross-border trade solutions, particularly between India and Japan.
While macroeconomic conditions and regulatory dynamics will continue to influence performance, the strengthened governance framework, improved capital position, and upgraded credit ratings provide a solid foundation for sustainable growth and long-term value creation for stakeholders.
Financial Snapshot
On a quarter-on-quarter (QoQ) basis, Yes Bank’s revenue slightly declined from Rs. 7,623 crore to Rs. 7,605 crore, a marginal decrease of 0.24 percent. The bank’s finance-related loss improved from Rs. -809 crore to Rs. -740 crore.
Profit before tax (PBT) rose from Rs. 1,006 crore to Rs. 1,085 crore, up 7.85 percent, while net profit increased from Rs. 745 crore to Rs. 809 crore, marking an 8.61 percent growth.
On a year-on-year (YoY) basis, revenue decreased slightly from Rs. 7,725 crore to Rs. 7,605 crore, down 1.55 percent. Finance-related loss widened from Rs. -580 crore to Rs. -740 crore. PBT, however, surged from Rs. 691 crore to Rs. 1,085 crore, up 57.04 percent, and net profit jumped from Rs. 516 crore to Rs. 809 crore, an increase of 56.6 percent.
Yes Bank’s borrowings have shown a significant decline, dropping from Rs. 1,13,790 crore in March 2020 to Rs. 71,971 crore in March 2025, underscoring a disciplined approach to deleveraging and balance sheet strengthening over the past five years.
About Yes Bank
Yes Bank is a full-service commercial bank headquartered in Mumbai, offering a diverse range of products and services for retail, MSME, and corporate clients. The bank operates its brokerage business through YES Securities, a wholly owned subsidiary, and maintains a pan-India presence, including an International Banking Unit (IBU) at GIFT City and a representative office in Abu Dhabi. Its digital and corporate offerings are aimed at supporting business expansion and cross-border trade flows.
Written By Manan Gangwar
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