‘Unfounded’: FAB dismisses reports of Yes Bank stake purchase

First Abu Dhabi Bank (FAB) said it is not considering buying a 51 per cent stake in Yes Bank after numerous media reports suggested that the UAE’s largest bank, by assets, was one of the potential buyers weighing a bid for a $5bn majority stake in the Indian lender.

“Recent reports suggesting that FAB is considering acquiring a stake in Yes Bank are unfounded,” the Abu Dhabi-listed bank said in a regulatory filing, adding that it is not evaluating any possible offer for a stake in the Indian bank.

Sources told Bloomberg that the stake sale has also drawn preliminary interest from Japan, including Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group. However, it remains uncertain how eager Japanese financial institutions are for the deal and whether they will move forward with it.

Considerations are reportedly ongoing, and the potential size of the stake sale could change. Similarly, the bank’s shareholders may decide against pursuing a deal, or some could consider other investment options.

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

Banks in the GCC region, FAB included, have been casting overseas for expansion opportunities, with lenders in Türkiye and Egypt among its targets, as well as Standard Chartered.

McKinsey said, in a February report, that mergers and acquisitions (M&A) remain a high priority for financial services players heading into the mid-2020s. Most financial services executives across Europe, the Middle East, and Africa (EMEA) expect M&A to remain a high priority for banks to maintain or gain momentum.

Earlier in May, UAE’s First Abu Dhabi Bank (FAB) was linked with a possible acquisition of Turkish conglomerate Koc Group’s 61.2 per cent stake in Istanbul-based lender Yapi Ve Kredi Bankasi (Yapi Kredi).

However, a deal between FAB and Yapi Kredi was hampered by disagreements over price.

The Abu Dhabi bank has made several attempts to acquire a lender outside the region in search of growth. Last year, it was weighing an offer of as much as $35bn for Britain’s Standard Chartered and tried to buy Egypt’s biggest investment bank EFG Holding in 2022.

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