SBI Considers Block Deal to Sell Entire Stake in Yes Bank, Potential Sale of ₹5000-7000 Crore

8 Feb 2024 , 03:08 PM

State Bank of India (SBI) is considering selling its entire stake in Yes Bank, with a block deal as the preferred mode of sale. The potential block deal could involve Yes Bank shares worth ₹5000-7000 Crore, and no taxes are expected to be applicable on the sale, according to sources.

SBI may discuss the sale of Yes Bank shares in an upcoming board meeting, and the proceeds from the sale are intended to enhance balance sheet liquidity.

There will be no lock-in period for SBI regarding the sale of Yes Bank shares. If the shares are sold in the open market, SBI may avoid equity dilution for capital requirements.

A significant block deal involving 23.55 Crore shares of Yes Bank recently took place. In July 2022, Yes Bank’s board proposed exiting the reconstruction scheme initiated in March 2020, where eight banks led by SBI acquired stakes.

As of December 2023, SBI holds 26.13%, HDFC Ltd holds 3%, and ICICI Bank holds 2.61% equity in Yes Bank. In Q3 FY24, Yes Bank reported a net profit of ₹231 Crore, marking a 4.4-fold increase YoY and a 2.8% increase QoQ.

Net interest income (NII) rose 2.3% YoY and 4.8% QoQ to ₹2,017 Crore, with a net interest margin (NIM) of 2.4% for the quarter. The bank is focusing on yield accretive segments, with a growing share of retail loans expected to support margins.

Net advances increased by 11.8% YoY and 4.0% QoQ to ₹2.2 Lakh Crore, with the share of retail and SME loans rising to 63%.

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