Sumitomo Mitsui Banking Corporation (SMBC), part of Sumitomo Mitsui Financial Group (SMFG), has agreed to acquire a 20% stake in YES Bank, making it the largest shareholder in the Indian private sector lender.
The investment, valued at approximately Rs134.8bn ($1.57bn), is subject to regulatory approvals, including from the Reserve Bank of India and Competition Commission of India.
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The transaction involves a 13.19% secondary stake purchase from State Bank of India (SBI) and a 6.81% aggregate stake from other bank shareholders, including Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank.
SMFG Group CEO and president Toru Nakashima said: “India represents a key market for us, and we see immense long-term potential in its dynamic and fast-growing economy.
“We are proud to invest in YES Bank, a leading Indian bank with visionary leadership and a demonstrated track record of improving profitability.”
YES Bank, said to be the sixth-largest private sector commercial bank in India, has over 1,200 branches along with digital presence.
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By GlobalDataThis investment is expected to make YES Bank an “equity-method affiliate” of SMBC and marks the largest cross-border investment in the Indian banking space.
YES Bank managing director and CEO Prashant Kumar said: “We are excited to welcome SMBC, a globally renowned financial partner, as a major shareholder whose investment marks a pivotal step in our next phase of growth. We expect to benefit from their global expertise and high governance standards.
“This investment is a powerful endorsement of our transformation journey and future potential. Over the past few years, our growth has been shaped by the strong partnership and unwavering support of SBI and they will continue to remain a valued stakeholder.”
YES Bank secured financial advice from Citigroup Global Markets and legal advice from AZB & Partners.
SMBC’s financial advisors were J.P. Morgan and Jefferies, with legal advice from J. Sagar Associates and Anderson Mori & Tomotsune on Japanese law aspects.
Meanwhile, in February this year, the Indian government begun the process to reduce its stake in certain public-sector banks (PSBs) and listed public financial institutions (PFIs) as part of its financial sector reforms.
