YES Bank sells stressed loans to Prudent ARC for Rs 203 crore

YES Bank said it has sold stressed loan of Katerra India to Prudent ARC for a cash consideration of Rs 203.40 crore, according to an exchange filing late Tuesday.

The lender on January 20 invited expressions of interest for sale of identified stressed loan exposures through auction under the ‘Swiss Challenge’ method. “Subsequent to the above, the bank has now concluded the transfer of exposure of the bank to Katerra India Private Limited to Prudent ARC Limited, an asset reconstruction company, and has received cash consideration of Rs 203.40 crore in relation to the same,” it said.

SoftBank Group-backed construction company Katerra in 2021 filed for Chapter 11 bankruptcy protection in the US.

In an interview with FE in February, MD and CEO Prashant Kumar had said the lender was not seeing any risk in any portfolio on an elevated level. While there were a few “issues” in retail loan portfolio, the lender took certain corrective steps. “Retail, definitely there was an issue, but we took certain steps and retail issues seems to have peaked out or will take some time to come down, but overall credit quality of the bank, in terms of GNPA and NNPA, is absolutely under control and there is no worry around it for us,” Kumar said.

In December 2022, Yes Bank had completed the assignment of its non-performing assets totalling Rs 48,000 crores to JC Flowers Asset Reconstruction (JC Flowers ARC). This was the single-largest sale of non-performing assets in the Indian banking system.