RBL Bank Offloads Rs 800 Cr In Stressed Credit Card Loans At 97% Discount
Private bank RBL Bank reportedly finalised a distressed asset deal, selling approximately Rs 800 crore worth of non-performing loans at a substantial discount, estimated at 97-98 per cent of the assets' gross book value. This transaction translates to a mere 2-3 per cent return for the bank, as per insiders familiar with the matter.
The sold portfolio primarily comprised credit card loans that had been in default for over two years, mainly consisting of accounts previously written off by RBL Bank with full provisions made, particularly from the challenging Covid period when higher defaults were recorded in the credit card segment.
While a news report suggests that Kotak Mahindra Bank was the buyer, independent confirmation of the purchaser's identity by NDTV Profit remains pending as of now.
Queries sent to RBL Bank and Kotak Mahindra Bank on Wednesday remained unanswered at the time of reporting.
According to insiders, this transaction is expected to help RBL Bank streamline its retail loan portfolio, allowing the management to redirect their focus towards expanding the book. They emphasized that such sales are a routine part of the bank's operations.
RBL Bank's gross non-performing assets stood at Rs 2,441 crore as of 30 September, experiencing a 1.5 per cent increase quarter-on-quarter. Within this, non-wholesale bad loans amounted to Rs 1,328 crore, with credit card bad loans contributing Rs 443 crore or one-third of the retail bad loans.
The Reserve Bank of India has consistently highlighted potential risks associated with unsecured retail loan portfolios of banks. In line with this concern, the regulator raised risk weights on such loans offered by both banks and non-bank lenders to bolster the overall balance sheet strength across the financial services sector.
Data from November indicated a 34 per cent year-on-year increase in outstanding credit card loans offered by banks, reaching Rs 2.45 lakh crore. In contrast, non-food credit for the system surged 21 per cent from the previous year, amounting to Rs 155.8 lakh crore.
