Japan’s SMFG in talks for minority stake in India’s Yes Bank

Sumitomo Mitsui Financial Group (SMFG), Japan’s second-largest lender, is in "advanced" discussions to acquire a significant minority stake in Yes Bank, according to Japanese media, citing people familiar with the matter.

Japan Times reported on Tuesday (May 6, 2025) that the potential investment underscores SMFG’s broader push to expand beyond Japan’s aging and slow-growth domestic market.

Offer price

The offer price for the stake in the Mumbai-based bank is expected to be influenced by prevailing market conditions, the people said, requesting anonymity due to the confidential nature of the talks.

While negotiations are ongoing, they may not necessarily result in a finalised deal, the sources added.

Shares of Yes Bank surged as much as 9.6% on Tuesday, marking the stock’s sharpest intraday gain in over six months.

Diversification

Facing demographic and economic headwinds at home, Japanese financial giants have been increasingly active in global dealmaking to diversify revenue streams.

Just last month, Nomura Holdings announced a $1.8 billion acquisition of select Macquarie Group assets in the U.S. and Europe.

Yes Bank, once mired in a crisis stemming from a surge in bad loans, was bailed out by a consortium led by the State Bank of India (SBI) in 2020.

While SBI has since trimmed its holding, it remains Yes Bank’s largest shareholder with a 24% stake. Other major investors include private equity firms Carlyle Group and Advent International.

A report from The Economic Times earlier suggested that Sumitomo Mitsui Banking Corporation (SMBC), SMFG’s core banking unit, is moving closer to acquiring a controlling interest in Yes Bank.

Interest

Bloomberg News had previously reported that global lenders — including SMFG — had shown interest in a potential stake.

Representatives for SMBC, Yes Bank, and SBI declined to comment on the ongoing talks.

In November, Bloomberg also reported that the UK-based Hinduja Group Ltd. was partnering with private equity firm Cerberus Capital Management LP in seeking to pick up a stake in Yes Bank Ltd.

Representatives of Cerberus and the UK-based Hinduja group, run by brothers Gopichand Hinduja and Ashok Hinduja, met Reserve Bank of India officials earlier this month regarding the bid.

The Hindujas already have a significant shareholding in IndusInd bank.