Bank for sale of debt and collateral

4 min read

Recently, many banks are continuing to sell and liquidate collateral and outstanding debts. Most recently, VietinBank announced that it will hold an auction of Dinh Vu – Quang Binh dry port, the collateral for the debt of Quang Binh Import-Export Joint Stock Company with a total value of nearly 197 billion VND by May 21, the principal debt is more than 161 billion. The starting asking price for the above property is more than 258 billion dong. The bank used to sell this debt in mid-2020.

In addition, this bank is also choosing to organize an auction for the debts of Tien Trading and Transport Co., Ltd. with more than 27.7 billion dong and Thao Manh Trading and Transport Co., Ltd. nearly 9 billion dong. Dong Phu more than 89 billion VND, Nhu Nguyet Co., Ltd more than 74 billion VND.

Previously, VietinBank also announced for the first time selling consumer loans of individuals worth VND6-16 million to recover. The total value of debt for sale is more than 75.5 million VND. These loans are unsecured.

VietinBank is one of the banks actively selling debt. Photo: VietitnBank.

Sacombank is also announcing a series of real estate for sale with a value of more than trillion dong. The largest auctioned property is real estate on Le Hong Phong Street, Dang Hai Ward, Hai An with a starting price of 400 billion VND.

The bank also offers a series of products under the XI Grand Court 256-258 Ly Thuong Kiet project, Ho Chi Minh City, with more than VND 631 billion, of which 13,258 m2 of B1 basement floor area is priced at VND 362 billion and 2,244 m2 of commercial floor Trade and service on 7th floor cost 126 billion VND.

Sacombank’s list of first-sale properties no longer has properties offered for trillions of dong. The total value of real estate decreased by more than trillion VND compared to the list announced at the end of March.

In addition, the bank also announced a number of individual real estate in a number of provinces including Hanoi, An Giang, Binh Phuoc, Binh Thuan with starting prices of hundreds of millions to tens of billions of dong.

Vietcombank Dong Anh announced the 4th sale of debt liquidation collateral, which is land use rights and assets attached to land at land plot No. 22, map sheet No. 62, address at 91 Ho Xuan Huong, ward My An, Ngu Hanh Son District, Da Nang City. Real estate has an area of ​​443.1 m2, the purpose of use is commercial and service land.

The property attached to the land is a 12-storey hotel building with a term of ownership until May 4, 2046. The property owners are Ms. Bui Thi Hue and Mr. Le Tri Nguyen. The hotel is called Hemera Boutique Hotel, located near My An beach – Da Nang.

The starting price Vietcombank offered for sale is VND 74.3 billion, 26% lower than the last announced price in September 2020. The auction step is 50 million VND, the deposit is 4.5 billion VND. The time for the bank to receive the bidding documents is until June 22 and the auction is expected to be held on June 25.

Vietcombank once offered to sell this hotel for VND 100 billion at the end of 2019, reduced to VND 81 billion in June 2020 and lowered to VND 79 billion in September 2020.

The bank is also selling collateral of Seafood 4 Joint Stock Company, including land rental value, investment costs on land (construction works, used machinery and equipment, expenses for embankment, excavation and reinforcement) and plants grown on land in Tan Hoa commune, Thanh Binh district, Dong Thap province with a starting price of more than 16 billion VND. The deposit is 10% of the starting price.

Cars are one of the most popular properties for sale by banks. VIB is also liquidating many collaterals to recover debts, including cars of Kia, Chevrolet, Hyundai, Mistubishi, etc., at much lower prices than the market. Like the 2016 Chevrolet Spark, which has traveled 192,182 km, the liquidation price is 180 million VND, while the market price according to VIB is 250 million VND

Or the 2017 Hyundai i10, which has run 17,212 km, is offered for sale by VIB for 270 million dong, while the market price according to the bank is about 300 million dong… Many other cars are for sale, priced from 180 million to several billion copper.

According to statistics with 25 banks, the total bad debt in the first 3 months of the year increased by 5% compared to the end of 2020, to 91,254 billion VND, accounting for more than 1.4% of the total outstanding loans to customers.

Bad debts of banks. Unit: billion VND.

ACB and Vietcombank are the two banks with the highest bad debt among the 17 banks that reported an increase in the first quarter, in relative terms. ACB’s debt group 3-5 increased by 61% to VND2,954 billion, bringing the proportion in the portfolio from 0.59% to 0.91%, the highest since 2016.

Some banks with group 3-5 debt increased by around 20%, possibly to MB 29%, HDBank 20% and NamABank 19%. In the lower group, VietCapital Bank, Saigonbank increased bad loans by 7%, SHB, VPBAnk, VietBank, VIB by 5%, LienVietPostBank, OCB, TPBank, BIDV 2-4%.

At the same time, the risk provision for loans to customers of banks increased by 12% compared to the end of 2020. The ratio of total bad debt coverage with 25 banks increased from 103% to 110%.

Vietcombank and Techcombank are two banks with a bad debt coverage ratio of over 200%. In which, state-owned banks have the highest bad debt coverage ratio in the system with 279%. This number is only lower than the 368% of the end of 2020 and far ahead of the previous period by only 100-180%.

After making full deductions, the sale of debts and collateral assets such as real estate, equipment, machinery, etc. is a way for the bank to recover capital and possibly profit on liquidation, since the loan value is often lower asset valuation.

Source: – Translated by