The IFC One Saigon owned by Viva Land, a subsidiary of Vạn Thịnh Phát Group. Real estate assets make up 70 per cent of total mortgages for bank loans, making them also the most common asset to be auctioned to recover debts. — VNS Photo Bồ Xuân Hiệp

State-owned bank Vietinbank is seeking to auction 10 land plots on Phú Quốc Island with a total reserve price of VNĐ27 billion (over US$1 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 Phú Quốc.

The reserve prices range from VNĐ2.4 billion to VNĐ5.2 billion.

Bidders need to deposit 10 per cent of the starting price for the auction to take place on July 4 in Rạch Giá 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 Dương Đông Town in Phú Quốc for over VNĐ25.3 billion.

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 per cent of all assets mortgaged for loans, and is the most likely to be auctioned to recover debts.

Việt Nam 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 unfavourable economic conditions.

According to the financial statements of nearly 30 banks, their total bad debts exceeded VNĐ224.14 trillion as of the end of March, up 14 per cent 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. — VNS