Sumitomo Mitsui Banking investment in YES Bank credit-positive, says Moody's
This story was originally published at 16:55 IST on 14 May 2025
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--Moody's: Sumitomo Mitsui Banking investment in YES Bank credit-positive
MUMBAI – Moody's Ratings Wednesday said Sumitomo Mitsui Banking Corp.'s investment in YES Bank is credit positive. It, however, added the acquirer's influence on the bank will be limited. "We do not currently plan to factor in any affiliate support in YES Bank after completion of the proposed transaction. If SMBC significantly increases its stake in YES Bank, we may consider incorporating affiliate support into YES Bank's ratings," the rating agency said in the release.
The deposit rating for YES Bank is Ba3, with a positive outlook, the release said. The rating agency said the acquisition was credit positive because the move would bring in a long-term partner having a "strong balance sheet and funding capacity" to support the bank's growth. SMBC can nominate two non-executive directors to YES Bank's board to support its governance and strategy, the release said.
Last week, YES Bank announced that SMBC will acquire a 20% stake from its shareholders such as State Bank of India and several other Indian banks which were part of the bank's reconstruction scheme in 2020, for around INR 134.8 billion.
"The deal will enhance SMFG's (Sumitomo Mitsui Financial Group) presence in India, which it considers has both medium- and long-term strong growth potential," Moody's said. SMFG already holds a 100% stake in SMFG India Credit Co Ltd., a medium-sized nonbank finance company.
The announcement came after market hours. On the National Stock Exchange, shares of YES Bank closed 0.4% higher at INR 20.96 on Wednesday. End
Reported by Kshipra Petkar
Edited by Akul Nishant Akhoury
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