HANOI, April 15 (Bernama-Xinhua): The four largest state-owned banks in Vietnam are struggling to recover the large number of bad debts mortgaged by real estate due to the slowdown of the market, reported Xinhua quoting local media.
The value of collateral for loans at the four banks, namely Vietcombank, VietinBank, BIDV and Agribank, exceeded 2 quadrillion Vietnamese dong (US$84.7 billion) each, Vietnam News reported, citing their audited consolidated financial statements for 2022.
In the collateral, real estate still accounted for the majority. At Agribank, the collateral of real estate accounts for about 91 per cent of the total collateral. The ratio of real estate in total collateral at the remaining three banks also ranged high, from 68-74 per cent, the newspaper reported.
Pham Thi Hoang Anh, deputy director of Banking Academy, said the real estate market in Vietnam has been slowing, making it difficult for banks to sell bad debts mortgaged with real estate to recover the debts despite big sell-off.
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, the newspaper said, citing the financial data service provider FiinGroup.
Experts said it would be difficult to find investors with enough financial potential to buy back large debts. At the same time, hurdles remain in legal procedures in handling collateral assets such as real estate, the newspaper said.
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 16-17 quadrillion dong (US$678-720 billion), according to FiinGroup. - Bernama-Xinhua
