Banks hold auctions to cut bad debts
Banks hold auctions to cut bad debts
Some banks are putting assets secured with non-performing loans worth hundreds of billions of Vietnamese dong up for auction in the first days of the Lunar New Year to speed up the resolution of bad debts.
Most non-performing loans (NPLs) are attached to assets borrowers bought or created thanks to these loans, including real estate, factories, enterprises, industrial clusters and projects.
Agribank Management Company (Agribank AMC) announced it would hold three auctions today to sell assets at a total starting price of VND118 billion (US$5 million). The auction will include three land lots and houses in HCM City and the southern province of Long An.
Agribank AMC will hold another auction on February 27 to sell assets from Dai Viet Company in the Central Highlands province of Dak Nong at a starting price of more than VND315 billion. The auction will include all machines, equipment, working houses and other construction works of the company’s industrial alcohol production project at the Tam Thang Industrial Zone.
BIDV, in conjunction with the Viet Nam Asset Management Company (VAMC), also announced it would sell assets of the Thuan Thao Nam Sai Gon Company and 95 individual borrowers on February 18 to recoup total debts of more than VND2.37 trillion. The sales will have a total starting price of VND761 billion.
According to Nguyen Van Du, deputy chief inspector of the State Bank of Viet Nam (SBV), enhanced legal frameworks in the National Assembly’s Resolution 42/2017/QH issued last year have helped banks and the VAMC better manage bad debts by allowing them to rapidly repossess collateral or assets secured with the loan money if borrowers default.
SBV’s reports showed banks handled VND149.22 trillion (US$6.37 billion) of NPLs last year, helping reduce the NPL ratio of the entire banking system to 1.89 per cent by the end of 2018 from 1.99 per cent by the end of 2017.
