At the end of the year, VietinBank suddenly put up for sale many "strange" debts. A VietinBank customer took out a consumer loan with a debt value including principal, interest, and penalty interest of more than VND260,000 but did not pay, so it became a bad debt.
Banks sell hundreds of unsecured consumer debts - Photo: Contributor
Selling bad debt from a few thousand dong
On the last working day of the year of the Dragon 2024, Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) announced consumer loan debt collection.
According to the list, there are a total of 400 consumer loans being sold by the bank. This list was also just announced by VietinBank more than a week ago, this latest announcement is the second time.
All consumer loans are unsecured. Among them, there is a customer with the highest outstanding debt of nearly 270 million VND.
Notably, a customer had a debt value including principal, interest, and penalty interest of just over VND 276,000 but did not pay, becoming a bad debt.
The total value of these 400 bad debts is 7.49 billion VND. The starting price offered by the bank is exactly equal to the value of the debt.
According to VietinBank, the method of sale will be individual debts, some debts or all debts. In terms of the method of selecting the debt buyer, the bank said it will choose the buyer who offers the highest price and at least equal to the starting price of each debt.
Early last year, VietinBank also offered to sell nearly 500 unsecured consumer loans, with the lowest debt amounting to just over VND2,000.
In Vietnam, credit institutions still regularly classify debts and make provisions for bad debt.
Regardless of the cause, borrowers with bad debt are greatly affected when they want to access credit later. Because banks often support credit activities with customers without bad debt through CIC checks.
Therefore, customers are advised to check their bad debt status and have timely solutions.
Many loans have special collateral
Not only are bad debts of very small value, banks are also selling large loans with special collateral such as… funeral homes.
Specifically, early last year, Agribank North Ho Chi Minh City branch announced the selection of an organization to appraise the debt of borrower Truong Thien Ha Joint Stock Company.
In addition to real estate in Hanoi, the collateral for Truong Thien Ha's loan includes existing and future assets such as civil works and technical infrastructure works at the Flower Garden and Funeral Home in Di An town (Binh Duong province). The project is built on an area of 4 hectares, including a funeral home, a general service building, and a tower for storing bones.
Agribank Asset Management and Exploitation Company (Agribank AMC) also organized an auction of millions of shares of Tracimexco Automobile Manufacturing and Production Joint Stock Company. Notably, when the bank put it up for sale, the company was about to be dissolved.
Or at the end of 2022, a bank even put up for sale a debt of up to 900 billion VND of a livestock company, but the collateral was... a flock of chickens.
In fact, the liquidation of collateral assets of many banks is quite difficult. A former bank leader said that many debts are very illiquid, but still have to be announced for sale. This is just a formality for the bank to take steps to handle bad debts.
Even with real estate as collateral, liquidation is not easy. Currently, the valuation of assets for sale is not based on actual value, but on principal and interest. Each reduction is only 5-10%.
Source: https://tuoitre.vn/vietinbank-rao-ban-nhung-khoan-no-xau-la-lung-20250126094150206.htm
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