Japan's SMBC raises stake in Yes Bank, becomes largest shareholder
What's the story
Japan's Sumitomo Mitsui Banking Corporation (SMBC) has raised its stake in Yes Bank from 20% to 24.22%. The acquisition was made through an off-market transaction, making SMBC the largest shareholder of the Mumbai-based bank. The move comes after SBI sold a 13.18% stake to SMBC.
Stake increase
Yes Bank's plans to leverage SMBC's global capabilities
The Japanese banking giant acquired 132.39 crore shares through an off-market sale on September 22, according to a regulatory filing by Yes Bank. With this acquisition, SMBC's total holding in the bank increased to 759.51 crore shares. The private sector bank plans to leverage SMBC's global capabilities, especially in facilitating trade and investment flows between Japan and India, for growth in corporate banking, treasury services, and cross-border solutions.
Rating upgrades
Credit ratings upgraded
Yes Bank has also received an upgrade in its credit ratings from four domestic agencies - CRISIL, ICRA, India Ratings, and CARE. The bank now holds an AA- rating, its highest since March 2020. These upgrades are a testament to the bank's improved capital position, governance standards, and business performance.
SBI's position
SBI sold a 13.18% stake in Yes Bank
Last week, India's largest lender SBI completed the sale of a 13.18% stake in Yes Bank to SMBC for ₹8,888.97 crore. This deal follows a larger reconstruction scheme initiated by RBI and the government back in March 2020. Under this scheme, banks led by SBI had taken a 79% stake in Yes Bank to keep it afloat amid financial troubles.