Hundreds of billions of dong in discounts, many bad debts are still difficult to sell

Debt sales have been quite busy recently, but in reality, the results of debt sales by banks are still limited. Many debts with large-value collateral have been auctioned many times but have not found buyers despite hundreds of billions of dong in price reductions.

vnbusiness.vn

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The Vietnam Asset Management Company (VAMC) has just announced the auction of bad debt of Nam Bien Dong Tourism Company Limited, with a starting price of more than VND 411 billion. This is the 9th time VAMC has put this debt up for sale after 8 previous unsuccessful offerings. In 2024, this debt was first offered for sale at nearly VND 1,000 billion and continuously reduced the price in the following times but still remained sluggish.

This debt was purchased by VAMC at market value from Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank).

https://www.youtube.com/watch?v=TRaxSI-d72I

Previously, VAMC also announced the auction of bad debt of a group of customers including Phuc An Khang International Hospital Joint Stock Company and Binh Duong Construction Stone Company Limited, with a starting price of more than VND 175 billion. The above debt was purchased by VAMC from Sacombank under a contract signed in 2021. The collateral is mainly real estate located in Ho Chi Minh City and Binh Duong.

The auction is scheduled to be held on July 30, 2025. The debt has also been auctioned many times but has not been successful. In 2021, this debt was even provisionally valued at more than VND 2,270 billion, including principal and interest.

Not only VAMC, recently, debt management and asset exploitation companies of some banks have also continuously put bad debt up for sale. Typically, the Debt Management and Asset Exploitation Company Limited - Military Commercial Joint Stock Bank (MBAMC) announced the auction of the principal and interest debt of Thien Nam Import-Export Trading Joint Stock Company (Thien Nam Group) with a total provisional debt balance as of May 20, 2024 of nearly VND 17.92 billion. Of which, nearly VND 16.64 billion is the principal balance and VND 1.28 billion is the interest balance. The collateral assets are 8 plots of land in Ngu Hanh Son district, Da Nang city and real estate at 440/2A Binh Loi, Binh Thanh district, Ho Chi Minh City.

Similarly, Agribank Debt Management and Asset Exploitation Company Limited (Agribank AMC) announced the auction of all debts of KDG Steel Vietnam Company Limited and Khang Duy Investment Joint Stock Company (a business in the same ecosystem as KDG Steel) with a total value as of March 31, 2024 of VND 360.9 billion.

At many other banks, many debts have been auctioned many times but have not found buyers even though the starting price has decreased significantly compared to the outstanding principal and interest of the debt.

Banks said that one of the reasons is that the debts have secured assets, but the legal status is not yet complete, and there are even disputes. Meanwhile, the provisions of the law on the right to seize and handle assets of debt buyers are still limited, leading to individuals and organizations not being interested in buying debts from banks.

The new point in the Law amending the Law on Credit Institutions (CIs) effective from October 15, 2025 has legalized 3 groups of policies in Resolution 42/2017/QH14 on piloting bad debt handling. That is, CIs are entitled to seize secured assets (CSB) in cases where there is an agreement between the borrower and the CI; the assets of the party subject to enforcement of the judgment that are being used as collateral for the bad debt are only seized in cases of enforcement of judgments and decisions on alimony, compensation for damage to life, health or with the consent of the CIs.

At the same time, for collateral that is evidence in a criminal case, after completing the procedure of confirming the evidence and finding that it does not affect the handling and execution of the judgment, the prosecuting agency shall return this evidence to the credit institutions.

Currently, the total bad debt of the entire banking system has exceeded 1 million billion VND, equivalent to about 10% of GDP. The large amount of capital lying "dead" in the economy is making the cost of capital of banks more expensive, hindering the goal of reducing interest rates, as well as limiting the ability of enterprises to access capital. With the legalization of the right to seize collateral, this debt of millions of billions of VND will be handled more quickly in the coming time.