InvestorQ : What could be the outcome of SBI buying a stake in Yes Bank? Which bank is likely to benefit from the same?
Mitali Bhutta made post

What could be the outcome of SBI buying a stake in Yes Bank? Which bank is likely to benefit from the same?

Answer
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Dawn Cherian answered.
7 months ago


You need to understand that this has only been reported in the media and the same is yet to be confirmed either by the RBI as the largest shareholder of SBI or by the management of SBI. Hence you will have to wait for a confirmation on the same from official sources. What I understand is that SBI has been permitted by the government to create a consortium of banks led by SBI to buy into Yes Bank. It may be recollected that Yes Bank has been trying to raise capital to the tune of $2 billion to shore up its Tier 1 capital base. However, till date it has not managed to get any firm commitments from investors. The SBI move may be a move by the government to prevent Yes Bank from failing. In its current financial situation, Yes Bank does not have too much hope of recovery. Regarding who will benefit, clearly the benefit will be to Yes Bank as they get a life line. Regarding SBI, there is nothing like synergies that it can get but it can only expect some returns as an investment in Yes Bank and that will also depend on the pricing.