The truth about gold-plated apartments, luxury cars, and yachts on sale at bargain prices.

Even with the price reduction, it's still not selling well.

Recently, VietinBank Nam Thang Long branch, in coordination with the Civil Enforcement Department of Ba Dinh district, Hanoi, auctioned off apartment M3-SK04, on the 44th and 45th floors of the M3 Vinhomes Metropolis building (29 Lieu Giai Street, Ba Dinh district, Hanoi).

According to VietinBank's description, the apartment's balcony boasts panoramic city and West Lake views. The duplex apartment features 5 bedrooms, 4 bathrooms, a private swimming pool, stone-clad walls, a wooden staircase, and gold-plated railings.

This apartment is being auctioned by VietinBank to settle bad debts. The starting price set by VietinBank is 54.13 billion VND. Previously, in January 2023, VietinBank had offered this apartment for sale with a starting price of 59.35 billion VND.

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

Vietcombank - Sai Thanh Branch - also held an auction for a Maybach S600 with a starting bid of 7.8 billion VND. The car is collateral for Khai Hoan International Joint Stock Company, a business operating in the field of medical glove manufacturing. According to published information, this Mercedes Benz Maybach GLS 600 has license plate 51H-988.89, is black in color, and was manufactured in the USA in 2020.

FLC's yacht is being auctioned for the sixth time with a starting price of 25.8 billion VND.

VietinBank also announced the selection of an auctioneer for a two-seater McLaren 765LT Coupe to recover debt. The McLaren 765LT, manufactured in 2021 and bearing license plate 51K-011.86, was registered in early 2022. VietinBank set the starting bid at over 27.5 billion VND.

Another luxury asset, the FLC Alabatross yacht owned by FLC Group JSC, is also about to be put up for auction for the sixth time with a starting price of 25.8 billion VND.

FLC's yacht, a Galeon 660 Fly model, was built in Poland in 2017. The FLC Albatross has a design length of nearly 22 meters, a width of over 5 meters, and a hull height of 3.15 meters. The yacht features four bedrooms, a bar, a sunbathing area, and a party space. The registered capacity is 12 people.

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

Concerns about bad debt

Non-performing loans are a major concern for the entire banking system. The on-balance sheet non-performing loan ratio across the system has reached 4.95% of non-performing loans sold to the Vietnam Asset Management Company (VAMC). The number of loans at risk of becoming non-performing is very high.

According to Deputy Governor of the State Bank of Vietnam, Dao Minh Tu, this year the State Bank will direct credit institutions to strengthen the handling and recovery of bad debts; striving to keep the on-balance sheet non-performing loan ratio (excluding weak commercial banks) below 3%.

Recently, SSI Research, in its newly released report on the banking sector, suggested that the non-performing loan ratio may increase again in the first half of this year due to slowing credit growth and the lack of significant improvement in macroeconomic factors.

According to the research team's experts, from the end of 2022 to the present, regulations have mainly been issued to provide banks with mechanisms to delay the recognition and provisioning of bad debts, as well as to facilitate extensions for real estate developers to settle their upcoming debt obligations. However, even with such mechanisms, bad debts and debts requiring attention at the banks we studied increased by 53% and 42% respectively compared to the beginning of the year, as of the end of Q3/2023. Accordingly, the ratio of bad debts, Group 2 debts, and restructured debts increased to 1.98%, 2.38%, and 1% respectively. These problematic loans are equivalent to 5.3% of the total outstanding loans as of the end of Q3/2023.

Due to accelerated credit growth at the end of the year, reaching over 13.71% (up 4.7% compared to the previous month), SSI Research expects the non-performing loan (NPL) ratio to decrease to 1.89% in Q4 2023. This ratio may increase again in the first half of 2024 as credit growth slows and macroeconomic factors do not show clear signs of improvement. However, the NPL ratio at the end of 2024 will not change much compared to 2023, as banks are expected to accelerate NPL write-offs towards the end of the year and the economy is expected to recover more strongly.

(Source: Tien Phong Newspaper)

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