SMBC Unlikely to Increase Stake in Yes Bank Beyond 24.99%, Confirms Executive
Japanese lender Sumitomo Mitsui Banking Corporation (SMBC) has no immediate plans to raise its stake in India’s Yes Bank beyond the regulatory limit of 24.99%, a senior executive confirmed on Friday. Rajeev Kannan, group executive officer and head of SMBC Group’s India division, said the bank is focused on supporting Yes Bank’s board as its largest shareholder and does not intend to take on an executive role within the lender.
Currently, SMBC holds a 24.2% stake in Yes Bank. Under Indian takeover regulations, crossing the 25% threshold would trigger a mandatory open offer to purchase at least an additional 26% from public shareholders, potentially resulting in a majority stake of 51%. Analysts had previously speculated that SMBC might increase its holding and launch such an open offer.
SMBC received approval from the Reserve Bank of India in August to acquire up to 24.99% in Yes Bank, following a $1.6 billion deal in May to purchase a 20% stake from SBI and seven other shareholders. Kannan emphasized that Yes Bank still has several operational areas to address, and SMBC’s role will be to ensure the execution of the bank’s planned improvements.
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