In the difficult context, many banks continuously auction off mortgaged properties, including apartments, houses, factories, etc., to “recover” lingering bad debts.
Recently, BIDV organized an auction of the right to use more than 1,130m2 of land for the construction of a commercial and service area (in Ward 12, District 6, Ho Chi Minh City) with an initial price of over 72.8 billion VND. It is worth mentioning that this is the 14th time this asset has been put up for sale.
From the beginning of August 2023 up to now, Agribank has had nearly 100 announcements related to debt handling and collateral assets. Among them, many large-value debts and collateral assets have been sold by this bank.
Just the Agribank Trung Yen branch alone has announced the auction of 4 large debts of businesses in the real estate and construction sector. Specifically, this branch has put up for sale the debt of Hoang Hai Phu Quoc Investment Development Joint Stock Company with a starting price of over 281.6 billion VND. The remaining three debts are from Quang Trung Real Estate Investment Company (starting price of 71.3 billion VND), Anh Thang Construction Consulting Co., Ltd (starting price of 70.9 billion VND), and Nam Do Trading Construction Joint Stock Company (starting price of 21.2 billion VND).
Prior to that, Agribank had sold 7 debts of enterprises related to Tan Hoang Minh Group with a total debt of nearly 500 billion VND. These debts had collateral assets of tourism resorts and entertainment complexes, covering an area of nearly 34 hectares and over 20 kilometers of coastline in Bai Truong, Duong To commune, Phu Quoc city, Kien Giang province.
Image: Illustration
Recently, after 3 failed auctions, Agribank continued to reduce the price of a villa land plot in Da Nang in the hope of making a sale. The villa land plot of nearly 1,000m2 in Hai Chau district, Da Nang city, was further reduced by over 30% compared to the price listed over 1 year ago.
It is known that this is the collateral asset for the loan of Dai Duong Trading Industrial Service Co., Ltd at Agribank Nha Be branch under a credit agreement in 2016. Agribank took possession of the asset in July 2022 after Dai Duong Trading Industrial Service Co., Ltd failed to fully pay the principal and interest.
The fourth auction is scheduled to take place on March 1, 2024, with the starting price of the asset being 51.024 billion VND. This price is reduced by 24.61 billion VND (32%) compared to the initial price of 75.63 billion VND that Agribank initially listed in November 2022.
In the second and third auctions held in June and November 2023, the initial prices of the assets were 72.63 billion VND and 53.71 billion VND, respectively.
In addition to the mentioned assets, Agribank is also simultaneously auctioning off 5 villas at the Thuy San Hill Villa Area, Bai Chay Ward, Halong City, Quang Ninh province, with starting prices ranging from 2.52 to 4.8 billion VND.
Similarly, Vietinbank has announced the auction of the 6th debt of Tan Loc Joint Stock Company with a starting price of over 7.2 billion VND (including VAT). The collateral assets for the debt include land use rights and assets attached to the land in Khanh Xuan Ward, Buon Ma Thuot City, and land in Tan Hiep commune, Hoc Mon district, Ho Chi Minh City. Previously, in December last year, this asset block was announced for the first auction with a starting price of over 11.74 billion VND, equal to the outstanding debt.
In addition to the 4 state-owned banks, some joint-stock commercial banks have also been continuously selling off collateral assets in the form of real estate. Specifically, Sacombank has announced the sale of a series of bad debts with a total value of hundreds of billion VND, including products belonging to the Xi Grand Court apartment project in District 10 (HCMC) and the Phong Phu Industrial Park project (Binh Chanh district, HCMC). This is the 5th time Sacombank has auctioned off these debts.
Therefore, the risk of bad debts is increasing, forcing banks to continuously auction off thousands of collateral assets with attractive discounts but still face difficulties in liquidity. The further price reductions in subsequent auctions have not seen any hope as the real estate market in general is still sluggish in transactions.
Sharing about this, Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, said that currently, the total value of mortgage real estate at banks accounts for about 70% of the total collateral assets for loans. In many banks, this ratio even reaches 80-90% and is many times larger than the total outstanding loans. Therefore, real estate is often the most sold asset by financial institutions when customers cannot repay their debts for various reasons.
