Significant developments have emerged concerning the private sector bank Yes Bank. Reports indicate that Sumitomo Mitsui Banking Corporation (SMBC), a major Japanese financial institution, is positioning itself to acquire a stake in Yes Bank. Akihiro Fukutome, the global CEO of SMBC, is scheduled to visit India this week to advance discussions.
According to Mint, Fukutome will meet with officials from the Reserve Bank of India (RBI) and the State Bank of India (SBI) during his visit. Sources suggest that SMBC has commenced the necessary procedures for the acquisition, and the upcoming meetings are expected to focus on the specifics of the stake sale.
SMBC is reportedly valuing a 51% stake in Yes Bank at $5 billion, reflecting its commitment to making a significant investment in the Indian banking sector. As part of the due diligence process, SMBC has requested detailed financial and operational data from Yes Bank.
As of the market close on August 12, Yes Bank’s market capitalization was Rs 76,531 crore, underscoring its substantial presence in the banking industry. SBI currently holds a 23.99% stake in Yes Bank, acquired in 2020 as part of a rescue operation to stabilize the bank amid financial challenges. This intervention was a collaborative effort to safeguard the bank’s depositors and the broader financial system.
In July, the RBI approved the sale of a 51% stake in Yes Bank, marking the second instance of the central bank permitting an investor to hold more than 26% in an Indian bank. The first instance was in 2018 when the RBI allowed Fairfax Holdings Ltd to acquire a 51% stake in Catholic Syrian Bank. For this stake sale, SMBC has engaged JP Morgan as its financial advisor and J Sagar Associates as its legal advisor.
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