Banking News

DBS India puts ₹437-cr bad loans on the block, seeks all-cash bids

Mumbai: DBS Bank India has initiated the process to sell ₹437 crore non-performing loans including 69 accounts and asked for bids on an all-cash basis. The bank has set the reserve price at ₹30 crore, based on an anchor bid, which entails a recovery of 7%.

The portfolio of 69 accounts includes 11 fraud exposures.

Omkara ARC gave a cash and cash-security receipt offer for the base deal. The base price for the portfolio has been provided on the basis of a bid received by DBS India for the sale of the portfolio.

DBS India has invited bids for a counter bid for the portfolio of the NPAs, which should be at a minimum of 5% markup on the base price. The bank will hold the Swiss challenge on November 7, according to the bid document.

Under the Swiss Challenge, Omkara ARC will have the right to match the highest bidder. An Omkara ARC spokesperson did not immediately respond to a request for comment.

DBS Bank India is a wholly-owned subsidiary of DBS Bank. The bank’s asset quality has improved in FY23. The net NPA ratio improved to 1.17% compared to 1.61% in the previous year, while the gross NPA ratio showed improvement to 5.61% in FY23 from 9.5% in FY22. The bank reported a net profit of ₹228 crore for FY23, showing a 37% growth compared to FY22 net profit of ₹167 crore.The GNPA ratio of DBS Bank rose significantly, from 4.12% at the beginning of 2013, soaring to 13.5% in 2014. The bank has been bringing down the bad loan book over the last few quarters by selling the bad loan portfolio.

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