Significant news has emerged regarding the private sector Yes Bank. A Japanese bank has reportedly entered the competition to acquire a stake in Yes Bank. Akihiro Fukutome, the global CEO of Sumitomo Mitsui Banking Corporation (SMBC), is expected to visit India this week.
According to a report by Mint, the CEO of SMBC will meet with officials from the RBI and SBI during his visit. Sources indicate that SMBC has already initiated the necessary procedures for acquiring the stake, and now the Global CEO will engage with senior officials from RBI and SBI to discuss the stake sale plan
Sources indicate that Sumitomo Mitsui Banking Corporation (SMBC) has valued a 51% stake in Yes Bank at $5 billion. This valuation reflects SMBC’s interest in making a substantial investment in the Indian private sector bank. Additionally, SMBC has requested detailed financial and operational information from Yes Bank as part of its due diligence process, which is common in such high-stake negotiations.
As of the market’s close on Monday, August 12, Yes Bank’s market capitalisation stood at Rs 76,531 crore, indicating a significant presence in the banking sector. State Bank of India (SBI) currently holds a 23.99% stake in Yes Bank. This stake is part of a larger rescue effort that SBI initiated in 2020 when it acquired a 49% stake in Yes Bank to prevent the bank from collapsing due to financial instability. This intervention was part of a coordinated effort by SBI and other stakeholders to stabilise Yes Bank and protect the interests of its depositors and the broader financial system.
In July, the Reserve Bank of India approved the sale of a 51% stake in Yes Bank. This is the second such instance of the central bank allowing an investor to hold more than 26% stake in an Indian bank. In 2018, the RBI allowed Canada’s Fairfax Holdings Ltd to acquire a 51% stake in Kerala-based Catholic Syrian Bank. SBMC has appointed JP Morgan as its financial advisor and J Sagar Associates as its legal advisor for the stake sale plan.
