Yes Bank’s  billion stake said to attract lenders from Middle East, Japan

Yes Bank’s $5 billion stake said to attract lenders from Middle East, Japan


First Abu Dhabi Bank PJSC is one of the potential suitors for a stake worth about $5 billion in India’s Yes Bank Ltd, according to people with knowledge of the matter.

The Middle Eastern lender is bidding for a 51 percent stake in Yes Bank, the people said on condition of anonymity because the discussions are private. Japan has also shown initial interest, including Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. in the stake sale, the people said, though it is unclear how strong their appetite for a deal is and whether they will proceed.

Yes Bank shares have risen 16 percent this year, valuing the Mumbai-based lender at about $9.4 billion.

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Discussions are ongoing and the potential size of the stake sale could change, the people said. The banks may also decide against pursuing a deal or consider some other investment options, the people said.

Representatives of FAB, MUFG and SMFG declined to comment. A Yes Bank representative did not immediately respond to a request seeking comment.

Yes Bank this week said it has not received any in-principle approval from the Reserve Bank of India for the 51 percent stake sale.

State Bank of India has reduced its stake in Yes Bank after rescuing it from bad loans four years ago. It remains its largest shareholder with a 24 percent stake. The tenure of SBI Chairman Dinesh Khara is going to end in August, due to which the deal related to Yes Bank may be delayed. The government-appointed panel has recommended appointing Challa Srinivasulu Setty in his place.

Share sales, mergers and acquisitions and other dealmaking are on the rise in India as global investors look to take advantage of the country’s rapid economic growth.

  • Also read: Abu Dhabi Bank, Mizuho Bank first in race for SBI’s stake in Yes Bank

Middle Eastern banks like FAB are looking abroad for expansion opportunities, with its targets also including lenders in Turkey and Egypt, as well as Standard Chartered Plc.

Japan’s biggest lenders are looking for deals to boost their lending revenues and grow their investment banking operations. MUFG is eyeing a minority stake in HDFC Bank Ltd.’s consumer lending unit, Bloomberg News reported.

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(TagstoTranslate)First Abu Dhabi Bank (FAB)(T)Yes Bank stake sale(T)Mitsubishi UFJ Financial Group (MUFG)(T)Sumitomo Mitsui Financial Group (SMFG)(T)RBI approval(T)State Bank of India (SBI)(T)Global Investors in India