Sumitomo Mitsui Banking Corporation (SMBC) has completed the acquisition of a 20% stake in Yes Bank through secondary purchase of shares from State Bank of India and other banks, the private lender said on Thursday. Following the development, SMBC becomes the largest shareholder in Yes Bank while SBI continues as a major shareholder with over 10% holding.
New ownership structure and board representation
Followed by the stake acquisition, SMBC has nominated two directors on the board, according to the bank’s regulatory filing. With effect from September 18, Shinichiro Nishino and Rajeev Veeravalli Kannan have joined as non-executive and non-independent directors. However, this is subjected to shareholders’ approval.
Currently, Shinichiro Nishino serves as the head of global credit in the risk management unit of SMBC. Rajeev Veeravalli Kannan is the managing executive officer and the head of the India division in SMBC and Sumitomo Mitsui Financial Group.
Sandeep Tewari, who was the nominee director of SBI, has resigned from the position of the non-executive director with effect from September 17.
Positive impact on ratings and governance
The bank said it has received rating upgrade of AA- from all four domestic credit rating agencies – Crisil, ICRA, India Ratings and CARE – after the stake transfer.