Bandhan Bank gets binding bid worth ₹280.39 cr from ARC for housing finance NPA

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Bandhan Bank on Thursday said it has received a binding bid worth ₹280.39 crore from an asset reconstruction company (ARC) for a non-performing asset (NPA) portfolio in the housing finance segment.

The bank will take up the bidding as per the Swiss challenge method. However, the name of the ARC was not revealed by the lender.

The board of directors of the Kolkata-based bank has approved the proposal to sell its Housing Finance NPA portfolio, having days past due (DPD) of more than 180 days, with an outstanding of ₹775.62 crore (as on September 30, 2023), to an ARC, it said in a stock exchange filing.

“The bank has received a binding bid of ₹280.39 crore (i.e., 36.15 per cent of the outstanding pool) for the said NPA portfolio, on outright cash consideration basis. The bank is going for bidding as per the Swiss Challenge method and the decision of sale shall be taken as per the extant guidelines governing the Swiss Challenge method and the relevant policy of the bank,” the filing added.

During the second quarter this fiscal, the bank’s non-performing assets (NPAs), in absolute terms, rose 14.88 per cent year-on-year at ₹7,873.82 crore against 6,853.85 crore for the corresponding period of financial year 2022-23. Gross NPA ratio during Q2FY24 increased 10 bps at 7.3 per cent from 7.2 per cent in Q2FY23.

During Q2FY24, the bank’s provisions fell to ₹636.15 crore compared with 1,279.67 crore for the corresponding period last fiscal. The bank’s net interest income (NII) increased 11.4 percent y-o-y to ₹2,443 crore from ₹2,193 crore from the year-ago period. Net interest margin (NIM) soared 20 basis points y-o-y at 7.2 per cent