Commercial banks are rushing to sell immovable properties which are collateral for unpaid debts. But finding buyers has been difficult.
BIDV (the Bank for Investment and Development of Vietnam) has announced the selection of an institution to auction the debt of the Tai Nguyen Construction, Production and Trade Co Ltd.
The collateral for the debt includes land use rights and assets on the land to take shape in the future, belonging to Kenton project, located in Nha Be district, HCM City; and the rights for the quarry in Quoc Oai district, Hanoi.
Of these, Kenton project alone is valued at VND7.836 trillion which has been mortgaged by the debtor at BIDV, Maritime Bank and PVCombank.
BIDV also plans to sell the asset mortgaged by Hung Ngan Housing Company to collect debt worth VND518.7 billion in both principal and interest.
|Commercial banks are rushing to sell immovable properties which are collateral for unpaid debts. But finding buyers has been difficult.|
The collateral for auction includes land plots in HCM City, Hanoi and Kien Giang, including assets created by loans which are part of a multi-story housing and trade-service complex in district 12, HCM City.
The starting price is VND466.9 billion.
A series of other commercial banks are also promoting the sale of mortgaged assets to collect debts in accordance with the National Assembly’s Resolution No 42.
Sacombank is seeking buyers for a series of land plots worth tens to hundreds of billion of dong, including land plots in district 8 with a total area of 12.669 square meters.
Analysts commented that the number of businesses dissolved or suspending operation in the first months of the year increased sharply because of Covid-19, which led to the increase in bad debts. Banks have had to step up foreclosure and sale of mortgaged assets to collect debts.
The general director of a real estate firm with many properties said he is interested in the projects to be auctioned. These are good projects because they underwent legal check and banks valuation. Also, the prices of the products would be reasonable.
However, he would have to find out if the design of the projects fits his business purposes. If he buys projects with unsuitable designs, he would have to spend time to adjust the structure, or would not be able to gain added value.
Dinh The Hien, a respected financial expert, said it would be not easy for banks to find buyers. The real estate market was gloomy in 2019 and has become even worse because of Covid-19.
The Vietnamese real estate market has been feeling the pinch, but it can make a swift recovery when the pandemic is brought under control with support policies from the government and promotional campaigns from developers.
The slowdown in 2019 and the arrival of the COVID-19 pandemic in the opening months of 2020 saw Vietnam’s property market hit “double trouble”, but experts have said the possibility of a quick recovery remains.