Sumitomo Mitsui Financial Group Inc (SMFG) is eyeing an additional investment worth of $1.1 billion in Yes Bank, a Bloomberg report stated citing people familiar with the matter. This follows a previous investment made by the Japanese bank two months ago.
SMFG is seeking acquisition of about 5 per cent of Yes Bank from US investment fund Carlyle Group and other minority shareholders, the report added. SMFG is also considering investing around $680 million in convertible bonds issued by Yes Bank to support its growth plans.
The fresh investment, the Bloomberg report maintained, would bring the total amount to $2.7 billion, giving SMFG around 25 per cent stake in Yes Bank. “Considerations are ongoing and no final decisions have been made,” sources told the publication.
Shares of Yes Bank saw a significant jump as soon as the announcement came to fore. Its stock price surged 3.3 per cent to the day’s high of Rs 20.65.
Earlier in May, SMFG had agreed to acquire a 20 per cent stake in Yes Bank for about $1.6 billion. Owning a sizeable stake in a large Indian firm represents an opportunity for the Japanese lender to enter the country’s banking sector.
Yes Bank has gradually recovered since its 2020 rescue by the central bank, which intervened after the lender was overwhelmed by bad loans. The turnaround was supported by a capital infusion from SBI and other investors. In March 2020, SBI and the seven investor lenders had invested in the bank as part of the Yes Bank reconstruction scheme.
In a previous interaction with CNBC TV18, Prashant Kumar, MD & CEO, Yes Bank, had said that the transaction with SMBC is significant in the Bank’s transformation journey and had hoped that it will be completed by the second quarter of FY26.