VietinBank to auction 10 land plots in Phu Quoc island to recover debts

State-owned lender VietinBank is seeking to auction 10 land plots on Phu Quoc Island off Vietnam's southern province of Kien Giang with a total reserve price of VND27 billion (over $1.06 million) to recover loans from a borrower.

They add up to over 1,400 square metres, and belong to a single unidentified individual living in Phu Quoc.

The reserve prices range from VND2.4 billion to VND5.2 billion ($2.05 million).

Bidders need to deposit 10% of the starting price for the auction to take place on July 4 in Rach Gia town.

This is not the first time the person’s assets will be auctioned by Vietinbank to recover debts.

In July 2022, the lender sold eight plots of land in Duong Dong town in Phu Quoc for over VND25.3 billion ($995,180).

Banks across the country have been struggling to find buyers for mortgaged assets such as lands, villas and houses.

Other assets such as luxury cars, machinery, yachts, and factories have also been placed under the hammer with little success.

Real estate makes up 70% of all assets mortgaged for loans, and is the most likely to be auctioned to recover debts.

Vietnam is currently struggling with non-performing loans, which are in fact posing a threat to its banking system.

Analysts have raised concerns about them, warning there could be a further rise due to the unfavorable economic conditions.

According to the financial statements of nearly 30 banks, their total bad debts exceeded VND224.14 trillion ($8.82 billion) as of the end of March, up 14% from the end of last year.

The Asian Development Bank has warned of potential risks to the banking system stemming from irregularities in corporate bond issuances and real estate markets.