VietinBank to sell 358 properties to collect debts
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State-owned VietinBank is selling 358 foreclosed properties pledged by loan borrowers, including four- and five-star hotels, worth a total of VND8 trillion (US$337.69 million) to realize their debts.
The properties will be either auctioned or negotiated for sale.
The bank is also selling 38 vehicles, machines and other equipment.
The most valuable asset is a five-star hotel in Da Nang City built on a 1,200-square-meter parcel of land with 236 rooms and priced at around VND600 billion.
The second most expensive are two four-star hotels in Hoi An with around 100 rooms each and priced at VND420 billion apiece.
The lender is also set to sell nearly 60 other hotels and properties in Hoi An.
Vietinbank is also selling office buildings, including one worth VND213 billion in Ho Chi Minh City’s District 12, and a water treatment plant worth VND108 billion in Gia Lai Province.
The bank is also selling 566 consumer loans at 90% of their remaining value.
Other banks too have been selling off collateral assets this year to restructure their credit portfolio.
BIDV has been trying to auction a hydropower plant with a reserve price of VND325 billion but 10 attempts have proven unsuccessful.
Sacombank has been selling bad debts this year.
Banks saw credit quality deteriorate in the first quarter this year due to the slump in the property and consumer goods markets.
Bad debts in the sector rose from 2% to 2.91% in the first two months, according to the latest data available from the State Bank of Vietnam.
VNDirect analysts said in a note that banks’ rising bad debts are driven by the property sector, which accounts for 21% of all credit.
Questions & Answers
Q.What is the total value of the properties VietinBank is attempting to sell?
What is the total value of the properties VietinBank is attempting to sell?
VietinBank is selling foreclosed properties worth a total of VND8 trillion (US$337.69 million). This includes hotels, office buildings, and a water treatment plant, among other assets, to recover outstanding debts.
Q.Which specific assets are among the most valuable in VietinBank's current sale?
Which specific assets are among the most valuable in VietinBank's current sale?
The most valuable asset is a five-star hotel in Da Nang City, priced at around VND600 billion. Also, two four-star hotels in Hoi An are priced at VND420 billion each, making them the second most expensive properties.
Q.What was the primary cause of the increase in bad debts for banks this year?
What was the primary cause of the increase in bad debts for banks this year?
Banks saw credit quality worsen due to the slump in the property and consumer goods markets. VNDirect analysts specifically noted that rising bad debts are primarily driven by issues in the property sector.
Q.What has been the trend in bad debt percentages for Vietnamese banks this year?
What has been the trend in bad debt percentages for Vietnamese banks this year?
According to data from the State Bank of Vietnam, bad debts in the sector increased from 2% to 2.91% in the first two months of the year. This indicates a deteriorating credit quality for banks.
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