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Home Debt Purchasing India StanChart sells Rs 1,000 cr worth distressed assets

StanChart sells Rs 1,000 cr worth distressed assets

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Mumbai-based International Asset Reconstruction Company (IARC), in an all-cash deal, buys Rs 900-1,000 crore of distressed assets of Standard Chartered Bank.
This is said to be one of the largest deals in the asset reconstruction space in recent months.
 
Standard Chartered Bank recently registered reduced profits in India. The bank's bottomline for the FY12 stood at Rs.1,736 crore; down from Rs. 2,059 crore a year ago.
 
Standard Chartered witnessed gross NPA increase by Rs. 2,064 crore; while the net NPA increase by Rs. 296 crore. A major chunk of NPA came from four accounts which contributed nearly Rs. 2,000 crore this fiscal against Rs. 336 crore last year.

“Barring two or three accounts, the assets were purchased for cash considerations. We have started recovery in some of these accounts. The progress is reasonably good so far,” Birendra Kumar, managing director and chief executive officer of IARC.

The loans were sold at a discount to the book value. Still, StanChart said it had made a profit by selling these distressed assets, as it had also bought the loans at a sharp discount from other banks and financial institutions. The transaction involved 150-175 mid-corporate and small & medium enterprises accounts.
 
Sources said the bank sold these assets as it found an opportunity to make profit in an area where very few big-ticket transactions happen.

 

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