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Banks take drastic measures to settle bad debts

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The bad debt settlement process took a big leap after the National Assembly issued Resolution 42, giving more power to banks to collect debts, reported Bizlive. 

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A report from the State Bank of Vietnam shows that VND786 trillion worth of bad debts were settled from 2012 to June 2018. In the first six months of 2018 alone, VND58.8 trillion worth of bad debts were settled, of which VND56.7 trillion were settled by credit institutions.

Regarding debt settlement in accordance with Resolution 42, more than VND138 trillion has been settled, which helped reduce the bad debt ratio from 2.46 percent in late 2016 to 2.09 percent in late June 2018.

The bad debt settlement has been going well at Sacombank, which, after collecting VND20 trillion worth of bad debts in 2017, had collected another VND3.6 trillion by the end of June.

As for Dong A Bank, the total amount of bad debts and interest collected in the entire 2017 and the first eight months of 2018 was VND9.1 trillion.

Analysts attributed the progress to the recovery of the real estate market which heated up after a long period of stagnancy.

VAMC has announced its business plan under which it would buy debts with special bonds issued this year worth VND32 trillion at maximum.

The company has recently foreclosed 13 land use right certificates and assets on land at No 195 Nam Ky Khoi Nghia street to serve debt collection. This is the asset mortgaged by Thanh Pho Xanh JSC for a loan from Agribank.

Sacombank’s bad debt collection results in the first half of 2018 were modest compared with the target of VND19 trillion set for the entire 2018. However, the process is hoped to speed up in the last months of the year as the bank is taking drastic measures to sell mortgaged assets.

These include four land plots worth up to tens of trillions of dong, namely the Phong Phu IZ project in Binh Chanh which has the starting price of VND7.6 trillion; the Binh Tri Dong residential quarter project and half of the 530,000 square meter land plot No 122 in Binh Tri Dong B Ward (VND6.698 trillion); the Binh Thuy residential quarter in Can Tho City (VND4.565 trillion); and a housing project in Long Binh ward in district 9, HCMC (VND1.815 trillion).

With a lot of valuable assets on sale, the debt trading market is getting busier   In late August, Tan Hiep Phat, a beverage producer, announced the establishment of a debt trading company. 

Just within one year, since the day Resolution 42 took effect, 30 debt trading companies have been set up. 

US$1=VND22,000

 

Source: VNN

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