Bank of India scouting for buyers for ₹3,600 crore distressed loans

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Bank of India scouting for buyers for ₹3,600 crore distressed

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is seeking buyers for its ₹3,600-crore distressed loan portfolio, including advances given to the twin Srei Group companies in administration currently, two people aware of the development told ET.

The bank has shared a list of 65 such accounts with asset reconstruction companies (ARC), seeking initial interest from them.

The lender has asked ARCs to submit an expression of interest with an indicative price for the loan accounts they would like to acquire, said one of the persons cited above.

Bank of India officials declined to comment.

Bank of India’s outstanding loan to Srei Equipment Finance Ltd is ₹650 crore and to

is ₹377 crore, according to a note circulated by the bank.

These are among the two large accounts in the list of 65 defaulters or stuck advances. Srei’s administrator extended the deadline for accepting resolution plans by a month to July 30 following a request from potential bidders, given the complexities involved in the due diligence process, ET reported earlier.

The list also includes ₹535 crore in loans given to McNally Bharat Engineering Co Ltd, ₹202 crore to Vandana Vidyut Ltd, and Rs 183 crore to

Infrastructure. The other big-ticket loan accounts on the list are those of MBL Infrastructure, Steel and Power, Visa Power, and Crane Ltd.

Bank of India aims to clean up its books to improve its valuations and attract capital, another person aware of the development said.

In May,

(), too, circulated a list of 168 distressed loan portfolios totaling outstanding loans of ₹31,363 crore. Nearly a third of the portfolio comprised power sector loans.

After provisions, BoI’s net non-performing assets (NPA) stood at 2.34% of advances, totaling Rs 9,851 crore, for FY22. In the same period, the average net NPA for PSU banks is 1.55%, showed a presentation made by banks to the finance ministry. The bank’s gross non-performing loans stood at 10% against an industry average of 5.9% for FY22.

According to the Financial Stability Report of the RBI, gross NPAs of scheduled commercial banks fell to a six-year low of 5.9% in March 2022 and could fall to 5.3% by March 2023.

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