Shares of YES Bank jumped by 3% on 15 July, marking their biggest intraday gain in over a month, after media reports suggested that Japan’s Sumitomo Mitsui Financial Group (SMFG) is considering a fresh investment of $1 billion in the Indian lender.
According to a Bloomberg report citing unnamed sources, SMFG is looking to acquire an additional 5% stake in YES Bank from existing shareholders, including US-based Carlyle Group and other minority investors.
This would build on SMFG’s earlier investment made just two months ago. In May, the Japanese banking giant picked up a 20% stake in YES Bank for approximately $1.6 billion.
If the new deal goes through, SMFG’s total investment in YES Bank would rise to around $2.7 billion, giving it a 25% stake in the lender.
The move signals strong confidence in YES Bank’s turnaround story. Since its rescue by the Reserve Bank of India in 2020, after being weighed down by mounting bad loans, YES Bank has been on the road to recovery, with SBI and other financial institutions stepping in to stabilise it.
In addition to the equity stake, SMFG is reportedly also exploring the purchase of around $680 million worth of convertible bonds issued by YES Bank, further strengthening its commitment to the lender’s future growth.
This potential investment aligns with a broader push by SMFG and other Japanese financial firms to expand their footprint in India. Notably, in March last year, SMFG spent $700 million to fully acquire the company formerly known as Fullerton India Credit Co., having initially invested $2 billion in 2021. That entity focuses on housing and automobile loans, sectors where Japan’s banking groups see long term opportunity in India’s growing economy.
