InvestorQ : With the default by players like Altico and DHFL, how much losses could banks take on their real estate developer loans?
Rutuja Nigam made post

With the default by players like Altico and DHFL, how much losses could banks take on their real estate developer loans?

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2 years ago
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There is no clear answer to this question but real estate consultant, Anarock, has come out with some very interesting statistics about stress in realty loans. According to a report by Anarock, nearly 62% of the total real estate loans of $93 billion are completely stress free. That means nearly $58 billion worth of loans are free of any kind of stress. Out of the balance $35 billion worth of loans given to real estate developers, Anarock estimates that nearly $21 billion of loans of loans do have some kind of stress but they could be entirely or substantially resolved. The stress on these loans is largely on interest and not on the principal component. Hence with more time and some amount of waiver given to these borrowers, the issue can be brought under control. Lastly, there are about $14 billion worth of realty loans which are under severe stress due to excess leverage and may have to be written off. That would still be a big hit on banks / NBFCs. However, even in this case, some portion should certainly be recoverable.

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