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VAMC, banks auction mortgaged assets to recover bad debts
The Saigon Times Daily
Tuesday,  Sep 11, 2018,17:25 (GMT+7)

VAMC, banks auction mortgaged assets to recover bad debts

The Saigon Times Daily

VAMC and multiple banks have auctioned mortgaged assets to settle bad debts - PHOTO: THANH HOA

HCMC - Vietnam Asset Management Company (VAMC) and multiple banks have put up the mortgaged assets for auction to speed up the settlement of bad debts, according to Nguoi Lao Dong newspaper.

VAMC announced its business plan earlier this year, which stated the company would buy a maximum of VND32 trillion (US$1.4 billion) worth of nonperforming loans using its special bonds and would use cash to purchase VND3.5 trillion worth of bad debts. VAMC targeted settling some VND34.5 trillion worth of bad debts this year.

VAMC recently seized entitlement certificates over 13 land plots and land-attached properties, including a plot of land and assets on Nam Ky Khoi Nghia Street in HCMC’s District 3. Green City Construction Investment JSC had used the assets as collateral for loans taken from Vietnam Bank for Agriculture and Rural Development.

VAMC and Bank for Investment and Development of Vietnam (BIDV) also announced a plan to put up for auction the assets of Thuan Thao Nam Saigon JSC and 95 individual clients of the Phu Tai branch of BIDV in the south-central coastal province of Binh Dinh, with a total debt value of roughly VND2.4 trillion. As of June this year, they had accumulated a combined debt of more than VND1.9 trillion at VAMC and more than VND473 billion at BIDV.

Thuan Thao Nam Saigon’s auctioned assets include plots of land and properties in districts 1 and Binh Chanh, as well as 5.2 million Thuan Thao shares owned by Board Chairwoman Vo Thi Thanh.

Moreover, VAMC has authorized BIDV to sell the mortgaged assets of Tien Nga JSC, including two warehouses at the Tan Cang-Long Binh and Phuoc Tan inland clearance depots in Bien Hoa City of Dong Nai Province; the right to use the company’s land in Bien Hoa; and the right to claim debts and receivables from Tien Nga’s partners.

The starting price for the mortgaged assets is more than VND667 billion, including VND459 billion in principal.

In addition, Saigon Thuong Tin Commercial Bank (Sacombank) has put up for auction the Binh Tri Dong Residential Area project, consisting of a multistory apartment building and a sports area, as well as a land plot in Binh Tan District, at the reserve price of nearly VND6.7 trillion.

Sacombank has also offered the Phong Phu industrial park project in Binh Chanh District at a starting price of more than VND7.6 trillion. The land for the 134-hectare project on Nguyen Van Linh Street has a land use term of 50 years.

In August and September, Vietnam Bank for Industry and Trade (VietinBank) drew up plans to sell its mortgaged assets to recover bad debts. The Sam Son branch of VietinBank in Thanh Hoa Province has announced its intention to auction a land plot and its attached assets on Nguyen Du Street at the starting price of VND130 billion.

The bank’s HCMC Branch has also confiscated the collateral of NIVL JSC in the Mekong Delta province of Long An to recover VND236.4 billion in nonperforming loans.

According to statistics from the State Bank of Vietnam (SBV), the ratio of bad debts to total outstanding loans was 2.09% in the first half of the year, well below the 2.46% recorded at the end of 2016. Besides the commercial banks’ efforts, the Government’s Resolution 42 allowing for more flexible settlement of bad debts of credit institutions has helped produce many positive results in the handling of bad debts by the banking system.

In addition, the recovery of the real estate market has contributed to the bad debt settlement, said Su Ngoc Khuong, investment director at Savills Vietnam. Both domestic and foreign investors are keen on participating in commercial banks’ auctions of their mortgaged assets.

The central bank has proposed the Ministry of Natural Resources and Environment promptly issue regulations on the handling of lapsed real estate projects used as collateral for loans and has called on the Ministry of Justice to direct the General Department of Civil Judgment Enforcement to provide guidance so its subordinates can effectively adopt Resolution 42.

In response to concerns over the large number of property projects being auctioned for bad debt recovery, a banker in HCMC pointed out that these projects were reportedly feasible and have been sold at market prices.

SBV has called for support from the relevant ministries and agencies to accelerate bad debt settlements.

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