YES Bank may sell Rs. 32,344-cr bad loan

YES Bank is planning to sell its NPAs worth Rs 32,344 crore to asset reconstruction companies (ARCs). It has appointed EY to advise it on the sale. Several ARCs have been sounded off by EY to submit their bids for the book.

YES Bank has already made provisions of Rs 24,476 crore. These represent 76 per cent of its gross NPAs. The sale of the NPA book will help the bank regain its lost place in the banking industry, which was marred by a scandal involving its former promoter Rana Kapoor.

As part of its clean-up, YES Bank had recently sold bonds issued by troubled housing finance company Dewan Housing Finance Corporation (DHFL) for Rs 500 crore in the secondary market. The bank had invested Rs 2,000 crore in DHFL’s bonds and managed to make a recovery of 25 per cent.

The bank is also looking at the option of selling its mutual fund business to free up capital by the end of the current financial year. Under a new management, the bank is also in talks with other strategic investors to set up an ARC, which will house all the NPAs.