BIDV sells 27 apartments of The Era Town building to recover bad debt

17:10 | 07/10/2019
BIDV put 27 apartments on sale at The Era Town in Ho Chi Minh City to liquidate its non-performing loans provided to the project.
bidv sells 27 apartments of the era town building to recover bad debt
The Era Town became known for the prolonged disputes between its residents and the developer Duc Khai JSC

The BIDV Gia Dinh branch in Ho Chi Minh City’s Binh Thanh district has just announced selling 27 apartments of The Era Town (15B Nguyen Luong Bang, Phu My Ward, District 7) at the price of more than VND15 million ($652.1) per square metre, equalling VND2.2-5.5 billion ($96,000-240,000) per apartment of 136-368sq.m.

The deadline to receive dossiers for buying houses is October 30, and the apartments can be checked on the two days of October 19 and 26. Accordingly, purchasers have to open accounts at the bank and leave a deposit of at least 10 per cent of the apartment’s price. In addition, the bank also commits to support buyers with up to 60 per cent of the price in loans.

BIDV is one of three banks holding the largest volume of bad debts in the first half of 2019, and this may be the reason behind the urgent sale of The Era Town’s apartments.

As of the end of June, the three banks’ total bad debts reached VND41.265 trillion ($1.79 billion), up 6.5 per cent against early 2019 and 22 per cent on-year. In addition, irrecoverable debts occupied more than half of their bad debts.

BIDV ran the highest debt with VND21.121 trillion ($918.3 million), up 12.3 per cent against the beginning of this year. Especially, its irrecoverable debts accounted for 46 per cent of the total bad debts, equaling VND10.492 trillion ($456.17 million), substandard loans rose by 12 per cent to VND6.105 trillion ($265.43 million), while doubtful debts fell by 27 per cent to VND4.524 trillion ($196.7 million).

The rapidly expanding irrecoverable debts also raised the portion of BIDV’s bad debts to the total outstanding loan balance from 1.9 per cent in early 2019 to 1.98 per cent in late June.

The Era Town became widely-known for the prolonged disputes between residents and the developer Duc Khai JSC. One of the disputes was over the developer’s reluctance to organise a meeting with residents, prompting residents to file lawsuits at the People’s Committee of Phu My ward. According to the regulations, the developer is obligated to organise the first meeting with residents as soon as more than half of theapartments in the building are in use for more than 12 months. In case the developer does not organise the meeting, the ward People’s Committee has to organise the meeting as soon as receiving a proposal from the representative of apartment owners.

By Van Anh

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