SMBC Group Set to Acquire Majority Stake in YES BANK
Sumitomo Mitsui Banking Corporation (SMBC), one of Japan’s leading multinational financial services groups, is in advanced discussions to acquire a controlling stake in Yes Bank. Yes Bank is India’s sixth largest private lender.
The estimated value of the acquisition is around $1.7 billion. SMBC is set to acquire a controlling stake of up to 51%, which would make it one of the largest mergers and acquisition deals in the history of Indian private banking. The Reserve Bank of India (RBI) has reportedly given a verbal assurance to SMBC to retain a controlling stake.
Furthermore, the existing foreign direct investment (FDI) rules restrict any foreign banks from taking a controlling stake in Indian lenders.
In 2022, Yes Bank underwent some significant restructuring. It was coordinated by the RBI and supported by a consortium of local lenders, including the State Bank of India (SBI), which holds a 24% stake. The pioneers of the banking sector – ICICI Bank, HDFC Bank, Kotak Mahindra Bank, Axis Bank, and Life Insurance Corporation of India – LIC hold altogether 11.34% as stakeholders. Advent International and The Carlyle Group. are some private equity firms that hold stakes of 9.20% and 6.84%, respectively.
This is a strategic move by SMBC to expand in India, as the organisation also invested in Fullerton India Credit Company Ltd. and acquired a 74.9% stake worth $2 billion in 2021.
SMBC entered the Indian market in December 2021 and has opened branches in New Delhi, Mumbai, and Chennai. In 2024, SMBC has opened a branch in the Gujarat International Finance Tec-City (GIFT City).
This estimated acquisition by SMBC paves the way for the other stakeholder banks. Additionally, it gives Yes Bank a competitive advantage in the banking sector. The banking industry is changing rapidly, and with this potential acquisition, Yes Bank will enter a new chapter.
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YES BANK Acquisition
Sumitomo Mitsui Banking Corporation (SMBC), one of Japan’s leading multinational financial services groups, is in advanced discussions to acquire a controlling stake in Yes Bank. Yes Bank is India’s sixth largest private lender.
The estimated value of the acquisition is around $1.7 billion. SMBC is set to acquire a controlling stake of up to 51%, which would make it one of the largest mergers and acquisition deals in the history of Indian private banking. The Reserve Bank of India (RBI) has reportedly given a verbal assurance to SMBC to retain a controlling stake.
Furthermore, the existing foreign direct investment (FDI) rules restrict any foreign banks from taking a controlling stake in Indian lenders.
In 2022, Yes Bank underwent some significant restructuring. It was coordinated by the RBI and supported by a consortium of local lenders, including the State Bank of India (SBI), which holds a 24% stake. The pioneers of the banking sector – ICICI Bank, HDFC Bank, Kotak Mahindra Bank, Axis Bank, and Life Insurance Corporation of India – LIC hold altogether 11.34% as stakeholders. Advent International and The Carlyle Group. are some private equity firms that hold stakes of 9.20% and 6.84%, respectively.
This is a strategic move by SMBC to expand in India, as the organisation also invested in Fullerton India Credit Company Ltd. and acquired a 74.9% stake worth $2 billion in 2021.
SMBC entered the Indian market in December 2021 and has opened branches in New Delhi, Mumbai, and Chennai. In 2024, SMBC has opened a branch in the Gujarat International Finance Tec-City (GIFT City).
This estimated acquisition by SMBC paves the way for the other stakeholder banks. Additionally, it gives Yes Bank a competitive advantage in the banking sector. The banking industry is changing rapidly, and with this potential acquisition, Yes Bank will enter a new chapter.