UCO Bank to auction a part of stressed assets

Kolkata based UCO Bank has decided auction its bad loans in a bid to lower its non performing assets. It has called for bids from investors for a stressed portfolio of Rs 327 crore comprising 45 loan accounts.

These 45 accounts includes assets like J B Diamond, Ind Synergy and Asian Electronics, officials from banking industry told ET on condition of anonymity. A number of asset reconstruction companies are likely to bid, they added.

The bad loan market usually becomes active in the second half of a fiscal year as bank tries to meet annual targets by selling stressed assets. However not many banks have tapped the bad loan market so far this year.

UCO Bank's gross non performing assets stood at 3.64% or Rs 3542 crore of total loans for September ending 2011 against 2.39% or Rs 2058 crore a year ago.

Interestingly, UCO Bank had put on block a small portion of their bad loan in November 2011 but it has yet not declared results.

Source: EconomicTimes