Bandhan Bank receives bids from ARC for written-off portfolio outstanding ₹8,897 cr


Bandhan Bank on Wednesday announced receiving bids worth 801 crore from an asset reconstruction company (ARC) for the written-off portfolio with an outstanding of 8,897 crore. The bank will take up the bidding as per the Swiss challenge method. The decision comes after the board of directors approved transfer of Group’s loan and SBAL written-off portfolio to an ARC. However, the name of the ARC was not revealed yet.

As per the regulatory filing, Bandhan Bank said, “we would like to inform that pursuant to the approval of the Board of Directors of the Bank to transfer Group Loan and SBAL written-off portfolio to Asset Reconstruction Company (‘ARC’), the Bank has received a binding bid from an ARC, amounting to 801 crore, on Security Receipt consideration basis, for the written-off portfolio with outstanding of 8,897 crore.”

Further, Bandhan Bank added that it “shall go for bidding as per Swiss challenge method and decision of sale shall be taken as per extant guidelines governing Swiss challenge method and the relevant Policy of the Bank.”

On BSE, Bandhan Bank shares closed at 243.05 apiece flat compared to the previous closing. Its market cap is around 39,151.12 crore.

As of September 30, 2022, Bandhan Bank’s gross non-performing assets improved to 7.19% as against 10.8% in Q2FY22. The bank’s net NPAs further improved to 1.86% against 3.04% in Q2 of FY22.

Last week, Bandhan Bank obtained a guarantee under CGFMU, the Trust Fund set up by the Government of India, managed by NCGTC as a Trustee, with the purpose of guaranteeing payment against default in loans extended to eligible borrowers by banks. That being said, Bandhan bank has received a claim under the scheme for FY 2022-23 amounting to 916.61 crore.

Recently, Yes Bank offloaded its stressed assets loan portfolio to the tune of a whopping 48,000 crore to J.C. Flowers Asset Reconstruction (JC Flowers ARC). Yes Bank too had conducted a transparent bidding process based on the Swiss Challenge method under the aegis of RBI’s master direction on the transfer of loan exposures. The process was conducted with the bids submitted by JC Flowers being designated as the ‘Base Bid’.

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