The shares of State Bank of India (SBI) gained more than 3 percent on September 17 as the PSU lender announced the completion of the sale of 13.18 percent stake in Yes Bank to Japanese conglomerate Sumitomo Mitsui Banking Corporation (SMBC).
SBI shares were trading at around Rs 857.40 apiece, extending gains for the third consecutive session. Yes Bank shares meanwhile were trading in the red with marginal losses at around Rs 20.94 apiece.
About SMBC's deal to buy 20% stake in Yes Bank:
Earlier in May this year, SMBC agreed to buy 20 percent stake in Yes Bank, marking one of the largest foreign investments in an Indian private bank. Following this deal, SMBC will emerge as the single-largest shareholder in Yes Bank.
It was set to buy the largest chunk of over 13 percent stake from SBI (worth nearly Rs 8,889 crore), and the remaining (around 7 percent) from a group of Indian banks including Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank and Kotak Mahindra Bank. These banks had originally invested in Yes Bank at around Rs 10 per share during its reconstruction phase in 2020.
'Largest cross-border investment in the Indian banking sector'
"The partial stake sale by SBI and other shareholder Banks in YBL to SMBC represents the largest cross-border investment in the Indian banking sector. The transaction has received the necessary regulatory and statutory approvals including from the Reserve Bank of India and the Competition Commission of India," SBI said in its press release.
Following the divestment, SBI will continue to hold 10.8 percent stake in Yes Bank.
Here's what SBI Chairman said on Yes Bank stake sale:
"Yes Bank restructuring plan by RBI in 2020 was an innovative, first of its kind public sector – private sector partnership that was fully supported and facilitated by Government of India. We are incredibly proud of the journey we have shared with Yes Bank in supporting their transformation since we came onboard as the major shareholder in 2020," said SBI Chairman Challa Sreenivasulu Setty.
"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 Government of India and RBI. 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 added.
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