VietinBank announced the sale of consumer loans of 36 individuals to recover debts with a total value of more than VND 614 million. The largest loan is worth more than 21.3 million VND and the smallest is more than 1.1 million VND. The starting price is equal to the amount of the debt. The buyer of the debt will have to make a one-time payment.
The starting price does not include costs related to the transfer of ownership/use of the property and other costs (if any) when purchasing the debt, these costs are borne by the auction winner. The purchase and sale of debt are not subject to value added tax.
The method of sale is to sell each debt, some debt, or all debt. The bank will select the buyer with the highest bid and at least equal to the starting price of each debt.
Consumer loans for life are obliged to pay VietinBank according to signed credit contracts. Therefore, the buyer of these debts will have the right to claim the debt.
In May, VietinBank also offered to sell 9 consumer loans of individuals to recover. The largest loan is from Nguyen Hoang Sang with more than 16 million VND, followed by Le Manh Tho with nearly 15 million VND…. The total value of debt for sale is more than 75.5 million VND. These loans are unsecured.
In fact, the sale of debts has been widely announced by banks over the past time, however, the sale of consumer loans has little information.
A representative of Vietinbank once shared that selling consumer loans is one of the normal operations of the bank according to regulations to handle and recover debts. There are debts that are not bad but banks in need are still for sale. About the starting selling price equal to the book value is the desire of the “bank” to recover the debt, in case it cannot be sold, the bank will calculate to lower the price next time.
A representative of FE Credit Finance Company said that the sale of consumer loans in accordance with regulations is also done regularly by businesses. This is a transaction in the debt settlement process. When there is a need to recover capital for business activities, financial companies will sell loans. However, the debt trading market in this segment is not really busy.
Financial expert Dr. Dinh The Hien said that consumer lending thrives with increased risk of bad debt, but there is no true debt trading market in this segment.
Meanwhile, lawyer Truong Thanh Duc said that it is not easy to sell consumer loans at full cost of principal, interest and penalty interest. Because in dealing with bad debts, even loans with collateral, banks can only sell them at a price equal to 50%-70%. The debt purchaser also has to calculate the cost and profit after buying that debt.
Source: ndh.vn – Translated by fintel.vn