Friday, August 14 2020

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Banks to sell collateral assets amid fears of rising bad debts

Update: July, 20/2020 - 07:58

 

 

Era Town project in District 7, HCM City. Some assets auctioned by banks have struggled to find buyers. — Photo vietnamfinance.vn

HÀ NỘI — A number of banks have announced plans to auction off their collateral assets in an attempt to speed up bad debt recovery.

On the website of Vietinbank Debt Management and Asset Exploitation Co Ltd (Vietinbank AMC), since the beginning of July, Vietinbank has put six properties up for sale worth at least VNĐ223 billion (US$9.6 million). This value is based on the initial selling price of the auctioned assets.

The highest starting price is VNĐ190 billion for the land use rights and ownership of houses and other properties attached to a 3.23ha land situated at the Cần Thơ Centre complex.

Other properties on sale include 2ha land plot use right at the Tam Hiệp industrial park and port logistics at VNĐ10 billion and nearly 90 hectares of rubber trees and attached buildings in Đăk Tô District, Kon Tum Province at over VNĐ7.8 billion.

A collateral asset including 30 land use rights and land-attached assets with an area of more than five hectares in Kỳ Sơn District, Hòa Bình Povince will also be auctioned to handle debt worth VNĐ105 billion of Viet Thai Steel Joint Stock Company.

By the end of March, total non-performing loans of Vietinbank increased 56 per cent compared to the start of the year, driving the bad debt ratio to 1.83 per cent from 1.16 per cent.

Since April, BIDV has also put up many properties for sale to resolve bad debts.

Last week, BIDV’s Quảng Trị branch put up four assets pledged as security for loans for sale with starting price of VNĐ88 billion.

This month, BIDV also auctioned collateral assets of Trường Phát Investment Trading and Services JSC. The company’s debts as of February reached nearly VNĐ105 billion. The collateral asset is the land use right of 2,832m2 land in Ba Đình District, Hà Nội, being auctioned for at least VNĐ100.5 billion.

Earlier, BIDV’s Gia Định branch auctioned 65 apartments in the Era Town project in District 7, HCM City, with the starting price ranging from VNĐ2.1 billion to VNĐ5.5 billion per apartment.

Sacombank is also selling buildings, a sports complex and land in Bình Trị Đông District, HCM City, with the starting price of more than VNĐ6 trillion.

Adverse impacts of the COVID-19 pandemic have pushed many companies to their limits and forced banks to put their debts up for auction. However, as the real estate market has been in a difficult period since the latter half of last year, many high-value properties have struggled to find buyers.

Some of BIDV's mortgages have been sold for the third time but have yet to be sold while assets auctioned by Sacombank could not be transferred despite the bank has reduced the selling price. — VNS

 

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