Yes Bank Mulls Linking Pay to Performance Amid SMBC Acquisition Deal

Yes Bank is considering a major restructuring plan, including changes to the employee compensation structure to link remuneration with performance and the introduction of a leadership development programme. India’s sixth-largest lender will try to identify the behavioural competency of its top-level executives via the leadership programme to create a stock of future top bosses, the Mint reported. The development comes at a time when Japan’s Sumitomo Mitsui Banking Corp (SMBC) has joined forces with Yes Bank following a 20% stake acquisition worth Rs 13,482 crore. 

“The bank may increase the variable pay and bonus component starting with the senior leaders to make it more competitive in the banking industry,” the Mint reported, citing a banking industry executive. “They have lost some senior executives in the last one year, and while the leadership development programme and compensation changes are good measures, retaining talent will depend on how much of the programmes it can implement,” said the person.

Also Read: Yes Bank, Other Bank Stocks Soar after Japan-based Lender Buys 20% Stake in Yes Bank

This isn’t the first move by Yes Bank to internally restructure itself, the lender reportedly revamped teams across different departments, including retail, corporate and commercial banking businesses. Additionally, it had also asked four top-level officials to resign. Last year, the bank laid off nearly 500 employees as a part of its internal overhaul, the Economic Times reported. In 2025, the bank is reportedly focusing on cutting costs and improving its cost-to-income ratio as it walks on the path of recovery following the 2020 fiasco. 

Yes Bank’s cost-to-income ratio dropped to 67.3% in the fourth quarter of the financial year 2024-25 from 75.8% in the same period in FY24. 

The restructuring is happening at a time when Japan’s SMBC is likely to eventually gain management control of Yes Bank. Although SMBC acquired a 20% stake, with the Reserve Bank of India’s approval, it will up its stake up to 51%. 

“SMBC taking up management control is a strong possibility. Much will depend on what the RBI will decide about it. Sumitomo would be keen,” the Indian Express reported, citing a source.