Tax-Free Gains Announced
SBI, along with seven private lenders, are poised to gain a major financial advantage through a tax exemption. The banks involved—HDFC Bank, ICICI Bank, Kotak
Mahindra Bank, Axis Bank, IDFC First Bank, Federal Bank, and Bandhan Bank—had collectively agreed to sell a 20% stake in Yes Bank at a price of Rs 21.50 per share. This transaction allows them to avoid a 12.5% long-term capital gains tax, which would have been applicable without the exemption. This favorable tax treatment significantly boosts the profitability of the stake sale.
Banks Involved in Deal
The sale involved SBI and a coalition of private banks, playing a crucial role in the financial maneuvering. Besides SBI, the agreement included major private lenders such as HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, IDFC First Bank, Federal Bank, and Bandhan Bank. This collaboration allowed the group to collectively offload a 20% stake in Yes Bank. These banks strategically capitalized on the tax-free gains, optimizing their returns from the transaction. This united approach was instrumental in shaping the overall impact of the deal.
SMBC's Expanding Role
In parallel with the stake sale, SMBC has also been authorized by the Reserve Bank of India (RBI) to increase its stake in Yes Bank, potentially reaching up to 24.99%. SMBC’s request to increase its stake was approved by the RBI in August, and the Competition Commission of India gave its go-ahead in early September. This strategic investment not only allows Japan’s largest bank to enter the Indian market but also grants SMBC, a wholly owned subsidiary of Sumitomo Mitsui Financial Group, the ability to appoint two nominee directors to Yes Bank’s board, contingent on the RBI’s approval. The deal, valued at Rs 13,483 crore, is also a significant move for SMBC.
Financial Impact for SBI
For SBI, the transaction provides a significant boost, particularly given the context of the bank's recent financial performance and future outlook. Having recorded a net profit of Rs 19,160 crore in Q1 FY26, the sale offers a timely advantage. The gains from the Yes Bank stake sale come as a welcome relief, providing a cushion against anticipated pressure on net interest margins and a moderation in treasury gains, which were expected due to rising bond yields. The positive impact is felt as SBI strategically manages its financial portfolio amidst evolving market conditions.
