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Mumbai: bandhan bank Proposals invited from asset reconstruction companies (ARC) has reduced stake in its distressed retail mortgage portfolio worth Rs 500 crore bad debtSaid that people are aware of development.
The bank has offered to sell its home loan portfolio comprising about 5,800 accounts. The total original loan book in these accounts is around Rs 500 crore, said one of the persons cited above.
The private lender has not set a reserve price, the same person said, but indicated it would prefer an upfront cash offering. The bank also informed ARC that it would prefer to close the sale transaction by August. Bandhan Bank did not respond to ET’s request for comment.
Bandhan Bank shares fell 13% last month. Its shares closed at Rs 211.7 on the Bombay Stock Exchange, down 1.3% over the previous day.
The Kolkata-based private bank’s mortgage loan book stood at Rs 26,950 crore as of June 30 this year, according to disclosures made by the bank on its website. This included retail home loans, loan against property, construction loans and purchase of demonstrable retail loan books. The gross non-performing assets of the mortgage loan book as on June 30 stood at Rs 1,090 crore.
The bank had about Rs 21,000 crore in retail home loan Book at the end of 1st quarter. In October 2019, the bank acquired housing finance company Gruh Finance from HDFC, which had a retail loan book of Rs 17,600 crore.
Following the lockdown due to COVID-19, the central bank allowed banks not to classify an account as non-performing loan if the equated monthly installment is not paid between March and August 2020. The regulator also allowed one-time restructuring of loans for retail borrowers.
In the case of Bandhan Bank, the rise in delinquencies in retail home loans is partly due to the impact of Covid as it acquired the home portfolio a few months before the nationwide lockdown. Bandhan Bank has regularly sold its stressed loan book to ARCs to shore up its books.
