SBI’s Yes Bank Investment Yields 14% IRR

The State Bank of India (SBI) has recorded an internal rate of return (IRR) of approximately 14% (pre-tax) on its investment in Yes Bank, according to Chairman CS Setty. Speaking on November 4, Setty said the outcome marked both a financially and strategically successful conclusion to the lender’s three-year-long revival plan.

Setty emphasized that, while the return on investment was healthy, the primary goal was to ensure financial stability, not profit. “It is a good IRR, but more importantly, this was about ensuring that a critical bank was rescued and put back on track,” he told Moneycontrol.

Focus on Stability Over Profit

Setty noted that SBI’s intent in participating in Yes Bank’s reconstruction plan was to support the financial system at a crucial time, rather than to seek profits.

He recalled being part of Yes Bank’s board during the restructuring phase, witnessing the process from rescue to 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,” Setty said.

The SBI chairman referred to the induction of a new promoter as the final stage of Yes Bank’s revival journey.

Also Read: M&M to Sell Entire RBL Bank Stake Worth ₹682 Crore

No Urgency to Sell Remaining 10% Stake

SBI still holds around 10% stake in Yes Bank. On this, Setty clarified that the lender has no immediate plan to exit the remaining investment.
“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 stated.

Background on SMBC’s Investment Approval

In August, Japan’s Sumitomo Mitsui Banking Corporation (SMBC) received the Reserve Bank of India’s approval to buy up to 24.99% stake in Yes Bank from SBI and seven other shareholders.

This followed a May agreement in which SMBC committed to purchasing a 20% stake for $1.6 billion, marking India’s largest cross-border financial sector merger and acquisition.

SBI’s Strategic Role in Yes Bank’s Revival

According to Setty, SBI’s intervention ensured that a systemically important private sector bank was stabilized and guided toward sustainable growth.
The chairman called the experience “satisfying”, both for the financial returns and for successfully restoring confidence in the banking system.

Click here to explore:
FII DII Data
IPO
BSE Sensex