Yes Bank stake sale yielded 14% IRR, no compulsion to hold or sell remaining shares: SBI chairman CS Setty

SBI chairman CS Setty

State Bank of India (SBI) chairman CS Setty on November 4 said the bank has earned a healthy internal rate of return (IRR) of around 14 percent (pre-tax) on its investment in Yes Bank, marking a financially and strategically successful conclusion to the lender’s three-year-long revival effort.

Setty added that the outcome was satisfying not just from a returns perspective but also because it ensured the stability of a systemically important private sector bank.

"It is a good IRR, but more importantly, this was about ensuring that a critical bank was rescued and put back on track," the SBI chairman told Moneycontrol.

He added that SBI's primary intent in participating in the reconstruction plan was not profit-making but supporting financial stability at a crucial time.

Setty, who was part of the Yes Bank board during its restructuring, said he was proud to have witnessed both the rescue and its closure. "It was important that the restructuring reached a logical conclusion not in terms of a fixed period like three or five years, but by bringing in a strong strategic partner to run the bank," he said, referring to the recent induction of a new promoter that marks the final stage of the revival.

On the remaining 10 percent stake that SBI continues to hold in Yes Bank, Setty said there is no immediate plan to exit. "There is no compulsion for us either to hold or sell at this stage. We will take an appropriate call at the right time," he added.

In August, SMBC received Reserve Bank of India's (RBI) approval to buy up to 24.99% stake in Yes Bank from SBI and seven other shareholders after having inked a deal in May to purchase a 20% stake for $1.6 billion, India's largest cross-border financial sector merger and acquisition.