Bank of Baroda (BoB) has set aside Rs 8,906.73 crore of non-performing assets for sale to the asset reconstruction companies or banks in a bid to clean up its books as it tries to grow as a merged entity.
On April 1, 2019, Bank of Baroda merged with two other state-owned banks, Dena Bank and Vijaya Bank.
The majority of the assets shortlisted for sale include corporate accounts from Rs eight crore right up to Rs 2,104.61 crore loan to beleaguered telecom company Reliance Communications, which had promised to repay the bank after a deal with Reliance Jio that did not fructify.
ASSETS ON SALE
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- Rs 2,104.61 cr – loan to Reliance Communications
- Rs 903.45 cr – Alok Industries
- Rs 548.47 cr – Gammon India
- Rs 266 cr – GVK Power Gondiwal
- Rs 265 cr – Amtek Auto
- Rs 159 cr – Lanco Solar
- Rs 710 cr – Net profit reported by the bank in Q1
- 64 – Corporate loan accounts BoB has put on sale
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The other accounts the bank has showcased for sale is steel company Alok industries with a debt of Rs 903.45 crore, Gammon India with an unpaid debt of Rs 548.47 crore, GVK Power Gondiwal which has unpaid loans of Rs 266 crore, Amtek Auto with a loan of Rs 265 crore and Lanco Solar with a loan outstanding of Rs 159 crore. The bank has put on sale 64 corporate accounts.
The bank has notified that the interested bidders need to submit expression of interest (EoI) with an indicative price and likely terms and conditions. It also said that the bank will retain charge of securities on the non-fund based exposures. If in case the non-funded exposures get crystallised the portion that gets converted into a funded exposure will be sold to the ARC.
Banks have been shedding their corporate loans after the resolutions through the National Company Law Tribunal is taking time with some cases like Essar Steel languishing in the bankruptcy courts for nearly two years.
The bank's exposure in accounts under first NCLT list was Rs 5,820 crore and the second NCLT list was at Rs 6,957 crore as on June 30, 2019.
Bank of Baroda reported a profit of Rs 710 crore for the first quarter for the merged entity compared to a loss of Rs 49 crore in the same period last year on the back lower provisions.
Gross NPAs of the merged bank at the end of the first quarter were Rs 69,714 crore while fresh slippage for the quarter was at Rs 5,583 crore.
Domestic advances grew by 5.18% to Rs 5,33,054 crore as on June 30, 2019 from Rs 5,06,779 crore a year ago. The increase was led by retail loans, which grew by 20.54%. Domestic deposits stood at Rs7,85,861 crore as on June 30, 2019, up 8.87% over Rs 7,21,885 crore as on June 30.
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