SMFG said to eye US$1.1 billion additional investment in Yes Bank: sources

[MUMBAI] Sumitomo Mitsui Financial Group (SMFG) is considering making an additional US$1.1 billion investment in Indian lender Yes Bank, people familiar with the matter said, following a previous investment made by Japan’s second-biggest bank two months ago.

SMFG is seeking to acquire about 5 per cent of Yes Bank shares from US investment fund Carlyle Group and other minority shareholders, the people said, asking not to be identified because the deliberations are private. SMFG may also buy about US$680 million in convertible bonds issued by Yes Bank to help boost growth, the people said.

The fresh investment would bring the total amount to US$2.7 billion, giving SMFG a roughly 25 per cent stake in Yes Bank, the people said. Considerations are ongoing and no final decisions have been made, they said.

A spokesman for Sumitomo Mitsui Banking, the banking unit of SMFG, declined to comment. A representative for Carlyle declined to comment, while Yes Bank did not immediately respond to a request seeking comment.

Yes Bank shares have gained about 2.1 per cent this year, giving the bank a market value of about US$7.3 billion.

SMFG in May agreed to acquire a 20 per cent stake in Yes Bank for about US$1.6 billion. For Japan’s second-biggest lender, Yes Bank represents an opportunity to own a sizeable stake in a large Indian firm. Yes Bank has made a steady turnaround following a rescue by the central bank in 2020 when it was inundated with bad loans, and SBI had to inject new capital with other parties.

Sumitomo Mitsui and its Japanese peers have been sealing deals in India. It spent US$700 million in March last year to take full control of the local company formerly known as Fullerton India Credit after first buying a US$2 billion stake in 2021. The unit specialises in housing and car loans. BLOOMBERG