Union Bank of India expects to recover Rs 15,000 crore from bad debt accounts in the current financial year, and much of this is believed to come from accounts in the process of resolution of the debt. insolvency.
It plans to recover Rs 10,000 crore from National Company Law Tribunal (NCLT) accounts for the resolution of bad debts in 2022-23, the bank said in a conference call with analysts after the results were announced. of the June quarter 2022-23 last week.
Responding to a question about the recovery guidelines for the full year 2022-23, Managing Director and Chief Executive Officer A Manimekhalai said, “The recovery will be around Rs 15,000 crore.”
In addition, the public sector lender is also likely to transfer a few accounts under the new debt resolution firm NARCL.
A total of 44 bad loans have already been approved by the NCLT with a loan exposure of Rs 4,842 crore. Another 55 overdue accounts cleared by the Creditors’ Committee (CoC) are awaiting court approval.
The 55 NPA accounts to be approved by NCLT have a total exposure of Rs 5,168 crore.
“So almost around Rs 10,000 crore which we should expect in this financial year, that should definitely come… and (in) NARCL as well, another three to four months we expect a good number of accounts are likely to be moved,” the bank said in a transcript of the analysts’ call.
National Asset Reconstruction Company Limited (NARCL) is an asset reconstruction company set up by various banks last year to aggregate and consolidate distressed assets for resolution.
In the first quarter ended June of this financial year, the bank received only Rs 122 crore from the NCLT resolution.
The rest of the collection was done through traditional modes such as sale of properties, single settlement and Debt Recovery Tribunal (DRT) resolutions.
It made recoveries worth Rs 1,481 crore during the quarter and accounts worth Rs 1,212 crore were upgraded.
While the bank expects slippages in the range of Rs 13,000 crore in FY23.
In the first quarter of FY23, the lender wrote off bad debts of around Rs 4,000-4,500 crore against corporate sector loans; Rs 1,400 crore against MSME borrowing and Rs 200 crore against retail lending.
The new slippages in the April to June quarter of this financial year were worth Rs 3,714 crore.
Union Bank reported a 32% growth in net profit to Rs 1,558 crore in the quarter ended June 2022.
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