HSBC India will auction a substantial part of its bad loans portfolio. This move will clean up the British banks Indian books and will be the first foreign bank to auction sticky assets in the country. Two of the countrys largest banks - SBI and ICICI - have also initiated similar services.
HSBC has appointed Ernst & Young as its consultant. The account details will be disclosed on the website and interested parties will have to deposit Rs 3 lakh to access the data while the auction will be held in October. The bank proposes to auction about 50 accounts with a combined face value of around Rs 600 crore. It is likely to receive 10-12 bids from local and overseas banks and companies.
The move will help HSBC clean up its balance sheet. As in March 05, the banks gross non-performing assets (NPA) stood at Rs 409.2 crore and net NPA at Rs 63.2 crore. A proportion of the bad loans to be sold include loss assets, which have been written off and therefore not reflected in the balance sheet, while a part could be accumulated interest component.
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| Posted : 9/13/2005 |
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