Bandhan Bank Limited has informed the Exchange about conclusion of sale of identified unsecured NPA and Written-off Portfolios of the Bank.
BANDHANBNK · price
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Bandhan Bank has completed the sale of two stressed loan portfolios to Asset Reconstruction Companies (ARCs). The first is an unsecured NPA portfolio (loans over 180 days past due) with a principal outstanding of Rs. 3,165.25 crore, sold to ARCIL for Rs. 569.75 crore via the Swiss Challenge Method. The second is a written-off loan portfolio with a principal of Rs. 3,707.11 crore, sold to Phoenix ARC for Rs. 331.97 crore through auction. Total recoveries amount to Rs. 901.72 crore against combined principal of about Rs. 6,872 crore, implying a recovery rate of roughly 13%. Notably, the bank has subscribed to a significant portion of the Security Receipts itself (46.75% in the first deal and 62.16% in the second), meaning it retains meaningful exposure to future recoveries from these portfolios.
This is a balance sheet cleansing exercise that should improve reported asset quality ratios and free up management bandwidth from chasing bad loans. However, the bank's continued SR subscription means it still carries recovery risk on these assets, so the full benefit will depend on actual recoveries over time. Overall, a positive step for long-term book health though not a one-time windfall gain.