India’s Bandhan Bank has announced plans to conduct a Bandhan Bank NPA portfolio sale, with its board approving the sale of identified non-performing assets (NPAs) and written-off portfolios totalling Rs69.31bn ($770m) through a bidding process, according to a stock exchange filing.
The loan portfolios to be sold belong to the bank’s Emerging Entrepreneurs Business (EEB), which includes group loans, small business and agricultural loans, as well as the Aspiring Business Group (ABG).
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The Kolkata-based lender will use the Swiss Challenge method for the sale of its NPA portfolio with principal outstanding of Rs32.12bn, all of which are more than 180 days past due as of 30 September 2025.
Additionally, Bandhan Bank will use the auction route to sell a written-off loan portfolio valued at Rs37.19bn.
The Swiss Challenge auction is a process where banks first receive an initial bid for their bad loans and then invite counter-bids from other parties.
The bank compares these counter-offers to the original bid and can award the portfolio to the highest counter-bidder, with the initial bidder having the option to match the highest offer. This approach aims to achieve the best possible price for the bank’s loan portfolios.
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By GlobalDataAs of September, Bandhan Bank’s gross NPAs stood at Rs70.15bn. The gross NPA ratio and net NPA ratio remained largely stable on a sequential basis at 5% and 1.4%, respectively.
During the September quarter, Bandhan Bank carried out technical write-offs amounting to Rs8.65bn, of which Rs7.99bn was related to the EEB portfolio. The EEB Group constitutes 23.6% of the bank’s total loan book.
Gross slippages increased slightly to Rs15.9bn compared with Rs15.53bn in the June quarter, mainly driven by the EEB segment.
Slippages in the EEB portfolio were higher at ₹11.18bn during the quarter, up from Rs10.89bn in the previous quarter, highlighting ongoing stress in this segment, according to the management during its earnings call.
On 30 October, Bandhan Bank reported an 88% year-on-year decline in its September-quarter net profit to Rs1.12bn. Net interest income also decreased by 11.8% to Rs25.89bn from Rs29.34bn a year earlier.
Despite these challenges, the bank’s gross advances grew by 7.2% to Rs1.40tn, while total deposits rose by 10.9% to Rs1.58tn.
