Japanese Bank Aims for Major Stake in Yes Bank: CEO to Meet with Indian Regulators

Akihiro Fukutome, the global CEO of Sumitomo Mitsui Banking Corp (SMBC), is scheduled to visit India this week to explore the possibility of acquiring a substantial stake in Yes Bank Ltd, according to a report by business daily Mint. Fukutome is expected to engage in discussions with officials from the Reserve Bank of India (RBI) and the State Bank of India (SBI) regarding the potential acquisition. Sources informed Mint that SMBC is aiming for a valuation of approximately $5 billion for a 51 percent stake in Yes Bank. As of the close on Monday, Yes Bank’s market capitalization was around Rs 76,531 crore, or roughly $9.1 billion. “SMBC has begun due diligence and is requesting detailed information from Yes Bank,” a source told Mint. “The global CEO will meet with senior officials from the RBI and SBI early this week to progress the stake sale plan.”

SBI, which currently owns a 23.99 percent stake in Yes Bank, has been looking to reduce its share following the end of a three-year lock-in period last year. This stake was initially acquired as part of a government-led rescue plan in 2020.“The RBI is supportive of a global bank taking a stake in Yes Bank,” another source noted. The central bank has yet to approve the "fit-and-proper" assessment for the prospective new investor. This potential acquisition could set a precedent similar to the 2018 approval, where the RBI permitted Canada’s Fairfax Holdings Ltd to acquire a 51 percent stake in Kerala-based Catholic Syrian Bank, marking the first instance of a foreign investor obtaining majority ownership in an Indian bank. For this proposed deal, Sumitomo Mitsui has enlisted JPMorgan as its financial advisor and J Sagar Associates as its legal advisor. Yes Bank has appointed Citigroup to identify suitable promoters.