Yes Bank revival story: With SMBC as its largest shareholder, Yes Bank is strengthening governance, boosting profits, and reshaping India–Japan banking flows.
If you had asked investors in 2020 whether Yes Bank would ever regain its lost glory, most would have shaken their heads in disbelief. Once among India’s fastest-growing private banks, it had nearly collapsed under the weight of bad loans, poor governance, and risky lending practices.
Fast forward to October 2025, and Yes Bank is in the spotlight for all the right reasons. With Japan’s Sumitomo Mitsui Banking Corporation (SMBC) stepping in as the largest shareholder, Yes Bank is scripting one of Indian banking’s most dramatic revival stories.
But the question remains: Is this just another temporary boost, or has Yes Bank finally turned the corner? Let’s break it down.
Yes Bank’s Crisis Years: A Painful Lesson in Risk and Governance
Before we celebrate, we must remember how close Yes Bank came to vanishing from India’s banking landscape.
What Went Wrong?
- Aggressive lending: The bank extended large loans to troubled giants like IL&FS, DHFL, Jet Airways, and Cox & Kings.
- Hidden NPAs: Defaults piled up, but Yes Bank underreported bad loans, masking the problem.
- Governance issues: Former CEO Rana Kapoor’s tenure was marked by questionable practices and regulatory lapses.
- Liquidity crunch: By early 2020, panic withdrawals by depositors nearly crippled the bank.
At its worst, gross NPAs peaked at 16.8%. Trust—banking’s most valuable currency—was shattered.
The Turning Point: 2020 Reconstruction Plan
The Reserve Bank of India (RBI), State Bank of India (SBI), and other financial institutions intervened. Capital was infused, governance overhauled, and the bank was given a lifeline.
💡 What You Should Remember:
Yes Bank’s fall was a classic case of unchecked growth without risk controls. But its survival showed the power of coordinated rescue efforts in India’s financial system.
SMBC Becomes Yes Bank’s Largest Shareholder: Why This Deal Matters
Now in 2025, the game has changed. SMBC has acquired a 20% stake in Yes Bank, buying shares from SBI and other early rescuers.
Why is This a Big Deal?
- Largest cross-border investment in an Indian private bank.
- Two SMBC nominee directors now sit on Yes Bank’s Board.
- A balance sheet boost from one of the world’s strongest banks.
- A bridge for India–Japan banking flows, trade, and investments.
For context, SMBC is part of Sumitomo Mitsui Financial Group (SMFG), with a staggering USD 2 trillion balance sheet. For Yes Bank, aligning with such a heavyweight is like a struggling cricket player suddenly getting coached by Rahul Dravid. The experience, discipline, and credibility are invaluable.
💡 What You Should Remember:
This deal isn’t just about money. It’s about trust, governance, and global linkages. For investors, it signals a much stronger foundation.
Governance Upgrades: Yes Bank Gets a New Report Card
One of the biggest criticisms of Yes Bank in the past was its weak governance. With SMBC’s entry, that’s changing.
Ratings Upgrade
All four domestic credit rating agencies—CRISIL, ICRA, India Ratings, and CARE—have upgraded Yes Bank to AA–, its best rating since the 2020 crisis.
Why Ratings Matter
- Lower borrowing costs
- Stronger investor confidence
- Easier access to international markets
Think of it like a student who once failed exams now consistently scoring 80%. The market sees discipline and consistency, not just luck.
💡 What You Should Remember:
Good governance is not an overnight change. But with SMBC and SBI backing it, Yes Bank now has both credibility and accountability.
The Financial Snapshot: Signs of Stability
Numbers tell the real story. Let’s look at Yes Bank’s recent performance.
Q1 FY26 Highlights
- Revenue: ₹7,605 crore (slightly down QoQ and YoY, but stable)
- Net Profit: ₹809 crore (up 8.6% QoQ, up 56.6% YoY)
- Profit Before Tax: ₹1,085 crore (up 57% YoY)
- Borrowings: Down from ₹1.13 lakh crore in 2020 to ₹71,971 crore in March 2025
This is like watching a patient who was once in ICU now jogging in the park. Not at peak fitness yet, but clearly recovering.
💡 What You Should Remember:
Steady profits, reduced debt, and capital support indicate a healthy balance sheet—a far cry from 2020’s chaos.
Strategic Opportunities: Why SMBC + Yes Bank Could Be a Winning Combo
The deal opens doors to strategic synergies beyond capital.
1. Strengthening Corporate Banking
SMBC brings global expertise in corporate lending, treasury services, and trade finance. Yes Bank can tap into this knowledge to serve India’s growing corporate sector better.
2. Facilitating India–Japan Trade
Japan is one of India’s biggest economic partners. With SMBC in the mix, Yes Bank can position itself as the go-to bank for Indo-Japanese businesses, whether for financing, treasury solutions, or cross-border deals.
3. Expanding Digital & Treasury Operations
Yes Bank already has strong digital banking offerings. SMBC’s experience in global markets could further enhance digital treasury, payments, and FX solutions.
💡 What You Should Remember:
Yes Bank is not just surviving—it’s preparing to compete globally, with Japan as its anchor partner.
Risks and Challenges Ahead
Of course, it’s not all smooth sailing.
- Macroeconomic risks: Global slowdowns, interest rate changes, or geopolitical tensions could impact growth.
- Regulatory oversight: Yes Bank must maintain strict compliance to avoid repeating past mistakes.
- Execution risk: Partnerships look great on paper, but delivering on integration is the real test.
💡 What You Should Remember:
Yes Bank’s story is moving from crisis to stability to growth. But the journey will require constant vigilance.
Investor Sentiment: What the Market is Saying
Yes Bank’s stock reflects cautious optimism. On Oct 3, 2025:
- Opened at ₹21.08
- Hit a high of ₹21.45
- Up ~1.94% intraday
The rise isn’t massive, but it shows investors believe the SMBC deal is a long-term positive. In the Indian market, where sentiment drives momentum, this steady climb is a good sign.
Conclusion: A Defining Chapter in Indian Banking
From near-death in 2020 to becoming a global–domestic banking partnership in 2025, Yes Bank’s journey is a lesson in resilience.
For investors, it’s not just about today’s share price. It’s about whether Yes Bank can now transform into a reliable, growth-focused bank that avoids past mistakes while leveraging global opportunities.
👉 The big question: Would you trust Yes Bank again as part of your portfolio? Or do past scars still hold you back?
