The truth about gold-plated apartments, luxury cars, and discounted yachts

Price reduction still unsold

Recently, VietinBank Nam Thang Long cooperated with the Civil Judgment Enforcement Office of Ba Dinh District, Hanoi City to auction apartment M3-SK04, 44th and 45th floors of M3 Vinhomes Metropolis building (29 Lieu Giai - Ba Dinh District - Hanoi City).

According to VietinBank, the apartment balcony has a panoramic view of the whole city and West Lake. The apartment is arranged with 5 bedrooms, 4 bathrooms, has a private swimming pool, stone walls, wooden handrails, and gold-plated stair railings.

This apartment was announced by VietinBank to be auctioned to handle bad debt. The starting price offered by VietinBank is 54.13 billion VND. Previously, in January 2023, VietinBank had advertised this apartment for sale with a starting price of 59.35 billion VND.

In addition to high-end real estate, many luxury cars and yachts are also being auctioned by banks to recover debts. BIDV Bank - Phu Yen Branch - recently announced the auction of a Maybach S400 for more than 2.8 billion VND. The car is described as manufactured in 2017 and has traveled 138,786 km.

Vietcombank - Saigon Branch - also organized an auction of a Maybach S600 with a starting price of 7.8 billion VND. The car is the collateral of Khai Hoan International Joint Stock Company, a business operating in the field of manufacturing medical gloves. According to the posted information, this Mercedes Benz Maybach GLS 600 has the license plate 51H-988.89, black exterior, manufactured in the US in 2020.

FLC yacht auctioned for the 6th time with starting price of 25.8 billion VND.

VietinBank also announced the selection of an auction organizer for the 2-seat McLaren 765LT Coupe supercar to recover debt. The McLaren 765LT was manufactured in 2021, with license plate 51K-011.86. The car was granted a registration certificate in early 2022, with a starting price of more than VND 27.5 billion offered by VietinBank.

Another luxury asset, the FLC Alabatross yacht of FLC Group Corporation, is about to be auctioned for the 6th time with a starting price of 25.8 billion VND.

FLC's yacht belongs to the Galeon 660 Fly series and was built in Poland in 2017. FLC Albatross has a design length of nearly 22 m, a width of more than 5 m, and a height of 3.15 m. The yacht has 4 bedrooms, a bar, a sunbathing area, and a party area. The registered capacity of the ship is 12 people.

Previously, at the first auction in November 2022, this yacht had a starting price of 35.7 billion VND. After 5 auctions, this FLC asset has decreased by nearly 10 billion VND.

Bad debt concerns

Bad debt is a concern for the entire banking system. The bad debt ratio on the balance sheet of the entire system has reached 4.95% of bad debt sold to the Vietnam Asset Management Company (VAMC). The risk of bad debt becoming bad debt is very high.

According to Deputy Governor of the State Bank Dao Minh Tu, this year the State Bank will direct credit institutions to step up the handling and recovery of bad debts; strive to keep the bad debt ratio on the balance sheet (excluding weak commercial banks) below 3%.

Recently, the SSI Research team in its newly released report on the banking industry said that this year the bad debt ratio may increase again in the first half of the year when credit growth slows down and macroeconomic factors show no clear signs of improvement.

According to the research team's experts, from the end of 2022 to now, the regulations issued have mainly been in the direction of giving banks a mechanism to delay the recognition and provisioning as well as creating conditions to extend the time for real estate investors to settle their upcoming debt obligations. However, even with such mechanisms, bad debts and debts requiring attention at the banks we studied have increased by 53% and 42% respectively compared to the beginning of the year as of the end of the third quarter of 2023. Accordingly, the ratio of bad debts, Group 2 debts and restructured debts increased by 1.98%, 2.38% and 1% respectively. These problem loans are equivalent to 5.3% of the total outstanding loans as of the end of the third quarter of 2023.

As credit growth accelerated at the end of the year, reaching over 13.71% (up 4.7% compared to the previous month), SSI Research expects the bad debt ratio to decrease in the fourth quarter of 2023 to 1.89%. This ratio may increase again in the first half of 2024 when credit growth slows down and macroeconomic factors show no clear signs of improvement. However, the bad debt ratio at the end of 2024 will not change much compared to 2023, as banks are expected to accelerate bad debt write-offs at the end of the year and the economy will recover more strongly.

(Source: Tien Phong)

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