October 14, 2019 09:57

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Banks are struggling to sell collateral

10:57 | 08/06/2019

VCN - Collateral such as real estate and cars at banks are being offered for sale to speed up the recovery of bad debts.

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Houses on Nguyen Bieu Street offered for sale with a price of more than VND 195 billion by Sacombank.

Quickly selling land and cars

Sacombank is announcing the auction of real estate in Ho Chi Minh City, Hanoi and other provinces, ranging from a few billion to thousands of billions of dong. Typically, the land lot with an area of ​​nearly 61,000 m2 and the project of high-rise housing and sport and recreation area in Binh Tan District, Ho Chi Minh City with an area of ​​more than 473,000 m2 is being offered for sale at a starting price of VND 5,695 billion. Sacombank is also auctioning 37 land use rights of 7.2 hectares in the project of residential area of ​​Phuoc Yen Service Area (Long Ho District, Vinh Long Province) with a price of VND 343.4 billion. This residential area consists of long-term rural residential land and commercial service land with use duration up to 2062. In addition, there are many other properties offered for sale by Sacombank with a starting price of hundreds of billion dong such as 6,400 m2 factory area in Binh Thanh District (HCMC) with a starting price of nearly VND 424 billion; 1,770 m2 on Nguyen Bieu Street, District 5 with the price of more than VND 195 billion; Land lot of nearly 53,000 m2 of housing area in Binh Chanh District, Ho Chi Minh City with a starting price of VND 424 billion.According to President of SacombankDuong Cong Minh, in the first quarter of 2019, this bank has handled about VND 5,000 billion of bad debts and expected to boost the debt recovery from VND 10,000 to 15,000.

Agribank has also announced the auction of collateral and selected the auction of collateral to deal with debts. On June 6, Agribank Saigon will hold an auction of eight land lots in Cu Chi district with a total area of ​​some 51,000 m2 with a starting price of VND 69.5 billion. On May 30, Agribank Asset Management Company will also auction real estate assets in Hoc Mon district with an area of ​​more than 7,000 m2. This land lot is collateral for a loan of V.House Company at Agribank Nha Be and has been confiscated by Agribank AMC and Agribank Nha Be in cooperation with related parties from January 2019. Accordingly, Agribank AMC has offered the starting price for this land lot of VND 31.6 billion.

Other commercial banks have also auctioned collateral to recover debts, reducing the bad debt rate. Vietinbank’s Ho Chi Minh City Branch 7 is selling debt worth over VND 1,100 billion of Vo Thi Thu Ha Import Export Trading Co., Ltd. to recover debts. The collateral for this debt is eight land use rights and assets attached to land in Binh Duong, five land use rights and assets attached to land in Binh Phuoc and four factories and warehouses in Dong Thap.

In addition to real estate, banks also liquidate other collateral such as cars, ships. Vietcombank Ho Chi Minh Branch is selling a 23,492 DWT ship built in 1999 in the Philippines for a starting price at nearly VND 57 billion. Sacombank’s Debt Settlement Cente also liquidates a series of cars and trucks at prices from several hundred million to billion dong to recover debts.

The sale is still difficult despite discount

Although the issuance of Resolution 42 helps banks to be proactive in selling and recovering bad debts, banks still meet problems and take a lot of time in handling collateral. many properties have gone through many auctions but have not sold despite discounts after each unsuccessful auction. For example, eight land lots of 51,000 m2 area in Cu Chi which will be auctioned by Agribank Saigon Branch on June 6, were auctioned on April 25 at VND 77 billion. Accordingly, in the upcoming auction, Agribank will reduce the selling price of these eight lots to only VND 69.5 billion. In addition, many debts are offered at a lower price than the real value.

Agribank Hanoi Northern is going to auction the debts of Gold Land Real Estate Joint Stock Company with the starting price of only VND 22.5 billion, while the value of this debt is VND 37 billion (including principal and interest).

While bad debt has not been settled, the risk of arising new debts into bad debts is always lurking after the period of high credit growth. In addition, after five years of selling bad debts to VAMC, these bad debts will return to the bank if they have not yet dealt with. The five-year period has passed, the amount of special bonds reaches the maturity and credit institutions receive back bad debts.

Moreover, some banks have also repurchased debts from VAMC to handle and recover debts. Accordingly, in addition to six banks that have bought all bad debts in VAMC such as Vietcombank, Techcombank, MB, OCB, VIB and ACB, other banks such as TPBank, Kienlongbank, VPBank, BIDV, Eximbank, and SHB have also announced plans to repurchase and settle special bonds this year.

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The maturity of special bonds from VAMC along with the repurchase of bad debts raises bad debts in many banks. According to statistics from the financial statements of banks, by the end of the first quarter of 2019, bad debts in 22 banks still reached more than VND 84,200 billion, up 5.6% compared to the beginning of the year. In which, irrecoverable debts also increased to VND 46,400 billion. VietinBank is currently the bank with the highest amount of irrecoverable debts, amounting to VND 10,488 billion, an increase of nearly 11% compared to the beginning of the year. In many banks, irrecoverable debts account for more than 70% such as Vietcombank (71%), Sacombank (87%), SHB (74%), Techcombank (79%), VIB (76%), ACB (79%) ) etc.

By Khai Ky/ Huyen Trang