A number of commercial banks in Vietnam have successfully recovered trillions of Vietnamese dong in bad debt by selling off collateral in the first half of 2019, according to the Nguoi Lao Dong Online website.
|Vietnam's 500,000-dong banknotes. Some local banks have successfully recovered trillions of dong in bad debt by selling off collateral|
The banks have successfully recovered bad loans amounting to trillions of dong by auctioning and liquidating collateral, chiefly properties, in the first half of this year, the website reported.
Sacombank is selling several properties in HCMC and other provinces to recover debts, including land belonging to the Bao Hung residential area project and two other plots in District 8. The lender has set the starting price for the assets at VND928 billion.
Sacombank is also planning to sell land use rights in Binh Chanh District’s Phong Phu Commune, and has set the starting price at more than VND1.3 trillion. The two land lots it is offering span over 76,000 square meters, and can accommodate sports centers and entertainment areas.
In Binh Duong Province, the bank has invited bids for 15 lots, measuring over 29,600 square meters in total. The starting price for the properties is VND897 billion.
According to a representative of Sacombank, the lender is focusing on recovery of debts and collateral with a total value of over VND11 trillion. Sacombank has recovered nearly VND35.7 trillion since the time it started restructuring debt.
Meanwhile, an official from DongA Bank said that the lender recovered over VND1.8 trillion in bad debt in the first half of this year. Between August, 2015 and June, 2019, the bank took back around VND16.3 trillion.
According to the State Bank of Vietnam, between 2012 and June-end this year, the local banking system handled over VND937 trillion in bad debts, including over VND163 trillion settled in 2018. The bad debt ratio on the balance sheet was 1.91% at the end the second quarter.
Borrowers tend to pay off debts quicker when banks settle bad loans, as per the National Assembly’s Resolution 42, suggesting that their awareness of debt solvency has improved as credit institutions and Vietnam Asset Management Company (VAMC) have the right to seize collateral, the central bank commented.
Truong Van Phuoc, a member of the Prime Minister’s economic advisory group, said that the process of restructuring and handling bad debt has brought about positive results than in the past. Given the current solution, bad debt handling will not cost the State budget, while banks may gain high profits by liquidating collateral properties. SGT