Bandhan Bank To Sell Stressed Home Loan Portfolio To Asset Reconstruction Company, Shares Dip

The share price of Bandhan Bank Ltd traded 0.67% lower at Rs 237.55 a piece at 3:26 pm on Thursday after the lender said that it would sell its stressed home loan portfolio to an asset reconstruction company.

The bank today informed that the Board of Directors of the Bank has, on December 21, 2023, approved the proposal to transfer the Bank's Housing Finance NPA portfolio of Rs 7.76 billion in home loans, overdue by more than 180 days to an asset reconstruction company (ARCs).

In an exchange filing, the company said, "Pursuant to the applicable provisions of the SEBI LODR, we would like to inform that the Board of Directors of the Bank has, on December 21, 2023, approved the proposal to transfer the Bank's Housing Finance NPA portfolio, having Days Past Due ('DPD') of more than 180 days, with an outstanding of Rs. 775.62 Crore (as on September 30, 2023), to Asset Reconstruction Company ('ARC')."

The Bank has received a binding bid of Rs. 280.39 Crore (i.e., 36.15% of the outstanding pool) for the said NPA portfolio, on an 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," said the bank on Thursday.

For the quarter ending September 30, 2023, Bandhan Bank's gross non-performing assets ratio stood at 7.32% and net NPA was 2.32%.

Bandhan Bank stock price performance:

In the last one year, Bandhan Bank shares have fallen 2.06%. In this year so far, the stock is down 0.87%. Last 2 years and 3 years returns from the share price of Bandhan Bank Ltd have fallen 3.29% and 36.37% respectively. In the last six months, the stock has fallen 1.47%.