Japan’s SMFG said to be in talks to buy minority stake in India’s Yes Bank

[MUMBAI] Sumitomo Mitsui Financial Group (SMFG), Japan’s second-biggest lender, is in talks to buy a significant minority stake in India’s Yes Bank, according to sources familiar with the matter.

A potential offer for a stake in the Mumbai-based bank will likely be determined by market prices, the sources said, asking not to be identified because the deliberations are private. Talks are ongoing and may not result in a deal, the sources said.

Shares of Yes Bank jumped as much as 9.6 per cent on Tuesday (May 6), the biggest intraday gain in more than six months.

Japan’s ageing population and slow growth have been encouraging companies to look elsewhere for expansion, leading to a surge in outbound transactions.

The country’s biggest lenders have been scouring for deals overseas to boost their lending revenues and build out their operations.

Last month, Nomura Holdings inked a US$1.8 billion purchase of some Macquarie Group assets in the US and Europe.

State Bank of India (SBI) has pared its holding in Yes Bank after rescuing the lender several years ago when it was inundated with bad loans. It remains its biggest shareholder with a 24 per cent stake. Yes Bank also counts private equity firms Carlyle Group and Advent International as minority investors.

Representatives for SMFG’s Sumitomo Mitsui Banking, Yes Bank and SBI did not immediately respond to requests seeking comment.

The Economic Times earlier reported that SMBC is moving a step closer to taking control of Yes Bank.

A potential stake sale in Yes Bank had previously drawn interest from global banks including SMFG, Bloomberg News reported last year. BLOOMBERG