Monday, October 2, 2023 6:10:48 PM - Markets open
VN-INDEX 1,155.25 +1.10/+0.10%
HNX-INDEX 236.72 +0.37/+0.16%
UPCOM-INDEX 88.69 -0.09/-0.10%
Slowing realty market hinders big banks in bad debt recovery
Vietnam News - 4/13/2023 4:10:26 PM
 (0 ratings. You must sign in to rate.)
 Having hold of a large amount of bad debts mortgaged by real estate, Việt Nam’s four biggest State-owned banks are urgently recovering the debts, but the work remains tough for them due to the slowdown of the realty market.
According to the audited consolidated financial statements for 2022 of the four banks, Vietcombank, VietinBank, BIDV and Agribank, the value of collateral for loans at the banks exceeded VNĐ2 quadrillion each.
Leading is Agribank with VNĐ2.53 quadrillion, followed by VietinBank with VNĐ2.5 million quadrillion, BIDV with VNĐ2.46 quadrillion and Vietcombank with VNĐ2.1 quadrillion.
In the collateral, real estate still accounted for the majority. Especially at Agribank, the collateral that is real estate reached nearly VNĐ2.29 quadrillion, accounting for about 91 per cent of total collateral and increasing 13 per cent compared to the end of 2021.
The ratio of real estate in total collateral at the remaining three banks also ranged high, from 68-74 per cent.
Real estate is always the preferred asset to secure loans at banks. According to calculations by financial data service provider FiinGroup, up to 70 per cent of collateral for loans in the Vietnamese banking system is currently real estate. The value of collateral as real estate in the banking industry is up to VNĐ16-17 quadrillion.
Phạm Thị Hoàng Anh, Deputy Director of Banking Academy, said bank collateral assets are now very diverse, from real estate to cars, motorbikes, yachts and deposits.
However, as most Vietnamese people often think real estate is an asset that always maintains prices and can increase in the future, the main and most popular asset used to secure loans is real estate.
Banks often prefer real estate as mortgaged assets as it is easy to value and monitor the mortgages during and after loan disbursement as the assets cannot be moved.
In addition, the liquidity of real estate is always better than other commodities, so the recovery of debts through a collateral settlement can be easier.
However, as the real estate market has been slowing, it is not easy for banks to sell bad debts mortgaged with real estate to recover the debts despite big sell-off.
For example, the debt of BBP Paper Joint Stock Company at VietinBank has been offered for sale for the 18th time. The debt has a temporary value as of June 30, 2022, VNĐ389.2 billion, but the bank still found no buyer though the starting price announced by VietinBank at the latest auction recently for the debt was only less than VNĐ65 billion.
In the context that the real estate and corporate bond markets are less active than in the past, experts believe holding real estate as collateral brings more risks to banks.
According to FiinGroup, the banking system is facing potential bad debt risks from the real estate credit portfolio as the sale of the mortgaged real estate is difficult due to the slowdown of the real estate market.
Experts said it would be difficult to find investors with enough financial potential to buy back large debts. At the same time, there remain hurdles in legal procedures in handling collateral assets such as real estate. — VNS
Read original article here
Newer News
11/09 Hải Phòng has many advantages for strong development of property market
09/09 Residential property for digital nomads could be a potential segment
24/07 Hà Nội's apartment prices increase sharply despite market gloom
18/07 Hà Nội sees development prospects of real estate market in East: experts
29/06 Industrial real estate companies to benefit from shortage of land fund
17/06 Industrial real estate picks up steam
17/06 Trillions are expected to move into property market
11/05 M&A to pick up in property market
07/05 Housing supply expected to increase in the future with new credit package
20/04 Domestic real estate market needs credit solutions: experts
Older News
29/03 Government calls for broad-based measures to help realty sector
27/03 Strong signals of positive year for industrial real estate market
27/03 A lower rate might give buyers more confidence to make purchases and improve market attitude in general as many potential buyers are sitting on the fence waiting for prices to drop further.
14/03 Gov’t removes roadblocks for real estate market, firms expect drastic actions
14/03 Real estate market won’t recover until late 2024: experts
06/03 HCM City condo supply down in 2023
03/03 HCM City to remove challenges facing 116 property projects
16/01 Experts call for favourable policies to help real estate
16/12 Domestic real estate market boom unlikely in 2023
16/12 Domestic real estate market boom unlikely in 2023
Newsletter Signup
Top Stories
SSC to prohibit the use of automated order placement
Shares gain ground on the back of large-caps
Market expected to perform positively on Biden's visit
Stock market to regain growth momentum in H2
CPI increases 0.88 per cent in August
Market Update
Last updated at 3:05:02 PM
VN-INDEX 1,155.25 +1.10/+0.10%
Real-time chart
Top 5 Actives
Top 5 Gainers
Top 5 Losers
My Favorite Quotes
Your most recently viewed tickers will automatically show up here if you type a ticker in the Get Quotes box on the top of the page.
Company Research
Type in the symbol above for thorough background information, key statistics and financial information.
Stock Sectors
We continuously improve our services, here are the latest updates...
Allow you to monitor a customised group of securities. You can set up multiple Portfolios to help you better manage your investments.
Trigger Alerts
Get up-to-date alerts delivered directly to your email address.
Stock Screener
Allow you to filter the market and find exactly what sort of company you are looking for.
Live Terminal
Get instant access to FREE REAL-TIME streaming quotes for hundreds of stocks from HOSE, HNX and UPCOM exchanges.