Japan’s Sumitomo Mitsui Banking Corporation (SMBC) has approached the Competition Commission of India (CCI) seeking approval to acquire a 20 per cent stake in private sector lender Yes Bank, a PTI report stated. If approved, this deal worth Rs 13,483 crore, would mark the largest-ever cross-border investment in India’s banking sector.
The proposed acquisition comes on the heels of an agreement between SMBC and a consortium of eight banks—led by State Bank of India (SBI)—to offload a portion of their holdings in Yes Bank. SBI alone will dilute 13.19 per cent of its stake for Rs 8,889 crore, while the remaining 6.81 per cent will be sold by seven other lenders, including ICICI Bank, HDFC Bank, Kotak Mahindra Bank, and Axis Bank, for a consideration of Rs 4,594 crore.
SBI and the seven investor lenders had invested in the bank as part of the Yes Bank reconstruction scheme in March 2020.
A notice filed by the Competition Commission of India (CCI) on June 23 had stated, “The proposed combination relates to the acquisition of share capital and voting rights of Yes Bank by SMBC.”
In its submission to the CCI dated June 23, SMBC had described the deal as involving the acquisition of share capital and voting rights in Yes Bank. The parties had emphasised that the transaction poses no threat to market competition, regardless of how the relevant market is defined.
“To assist the CCI in its assessment, the parties have outlined potential overlaps in business activities across various segments, including lending, digital payments, deposit-taking, forex services, investment banking, loans against securities, and cash management,” they had added.
SMBC is a wholly-owned subsidiary of Sumitomo Mitsui Financial Group, Inc (SMFG). SMFG is the second-largest banking group in Japan with total assets of $2 trillion as of December 2024 with a strong global presence.
Once the transaction is completed, SMBC will become the single largest shareholder of Yes Bank.