India’s largest lender — the State Bank of India (SBI) — on Wednesday, September 18, announced that it has completed the divestment of about 13.18% stake in private bank Yes Bank. The stake was sold to Sumitomo Mitsui Banking Corporation (SMBC) of Japan for ₹8,888.97 crore.
Following the divestment, SBI will remain a shareholder of Yes Bank, holding a stake of 10.8%.
The acquirer Sumitomo Mitsui Banking Corporation is a Japanese multinational financial services company belonging to the Sumitomo Mitsui Financial Group (SMFG), SBI said in a filing.
It is among the leading foreign banks in India. According to a PTI report, it is the second-largest Banking Group in Japan, with total assets of about $2 trillion.
SBI’s Stake Acquisition in Yes Bank
SBI first acquired a stake in Yes Bank in March 2020 as part of the central government’s Reconstruction Scheme
Subsequently, SBI also acquired additional shares as part of a follow-on public offer by Yes Bank in July 2020.
The partial stake sale by SBI and other shareholder banks in Yes Bank to SMBC represents the largest cross-border investment in the Indian banking sector, it said.
The transaction has received the necessary regulatory and statutory approvals, including from the Reserve Bank of India and the Competition Commission of India.
SBI Chairman CS Setty said, “Yes Bank restructuring plan by the RBI in 2020 was an innovative, first-of-its-kind public sector — private sector partnership that was fully supported and facilitated by the Government of India. We are incredibly proud of the journey we have shared with Yes Bank in supporting their transformation since we came on board as the major shareholder in 2020”.
This is perhaps the best example of protecting the customer interests of a large bank by collaborative efforts of SBI and other banks under the guidance of the government and RBI, he noted.
“We are excited to welcome SMBC, a marquee financial institution, as a strategic partner through the largest cross-border transaction in India’s banking sector. Their global expertise will be a great complement to Yes Bank’s ongoing progress and future ambitions,” he said.
Following the stake sale news, SBI shares rose in trade, ending 3.02% higher at ₹856.95.
