
SBI could be looking to sell Rs 5,000-7,000 crore worth of YES Bank shares via block deal, CNBC Awaaz reported quoting sources. SBI, the report said, may avoid equity dilution if YES Bank shares are sold in open market for capital requirements. The stake sale is likely by March 31, the report added.
But soon after this news got circulated on internet, SBI released its statement The State Bank of India (SBI) on Thursday, February 8 issued a clarification, denying reports of a stake sale in private lender Yes Bank. In a regulatory filing to the stock exchanges, the country’s largest lender said that the media reports are factually incorrect.
“The bank would like to clarify that the news appears to be speculative. The bank is not involved in any negotiations concerning the subject of the news. Hence, the bank is unable to comment on the said article and its impact,” Yes Bank said in a separate exchange filing.
SBI’s Plan to Sell Yes Bank Stake: What report said?
The State Bank of India (SBI) is considering selling its entire stake in Yes Bank. They prefer to use a method called a “block deal” to sell the shares. SBI aims to sell Yes Bank shares valued between Rs 5000-7000 crore through this block deal. According to sources from CNBC Awaaz, no taxes will be charged on this sale.
SBI’s Approach and Considerations:
SBI won’t have any restrictions on selling its Yes Bank shares. The SBI Board will soon discuss the sale of these shares. The proceeds from this sale will be used to strengthen SBI’s financial position. If SBI sells the shares directly in the market, it might help them avoid reducing their ownership stake for regulatory requirements. A significant block deal involving 23.55 crore shares of Yes Bank recently occurred, as reported.
Background on Yes Bank and Its Ownership:
In July 2022, Yes Bank’s board proposed to exit a reconstruction scheme. In March 2020, eight banks, including SBI, acquired stakes in Yes Bank under a scheme. As of December 2023, SBI holds 26.13%, HDFC Ltd holds 3%, and ICICI Bank holds 2.61% equity in Yes Bank.
History and Recent Performance of Yes Bank:
In March 2020, due to financial troubles, the RBI took over Yes Bank and appointed Prashant Kumar as the administrator. Governance issues also contributed to the bank’s financial decline in 2020. In Q3 FY24, Yes Bank reported a net profit of Rs231 crore, marking significant growth compared to the previous year. Net interest income (NII) also increased, and the net interest margin (NIM) improved slightly quarter-over-quarter.
Yes Bank’s Current Focus and Performance Metrics:
- Yes Bank is concentrating on segments that generate higher yields.
- Retail loans are expected to boost the bank’s margins.
- The bank’s net advances increased, with a significant portion coming from retail and SME loans.
- Disbursements for the quarter included various types of loans, indicating diverse lending activities.