In most banks, real estate accounts for most of the value in the collateral for loans. Even the value of real estate is much higher than the loan balance.
- How did lending rates at banks gradually increase?
After having a mechanism to seize and auction assets to ensure bad debts, many banks said they would soon handle and recover these debts. The reason comes from the fact that most loans at banks have much higher collateral value than loans.
Which bank has the most mortgage assets?
Currently, although not the bank with the largest loan balance in the system, Vietinbank owns a guaranteed asset block for the most valuable loans.
Specifically, the asset being pledged at this bank is worth more than VND 1.74 million, double the bank’s current loan balance of VND 867,600 billion. More than 55% of which is value coming from real estate. Only the guaranteed asset value of this real estate has reached 961,000 billion, much higher than the current loan balance.
Similarly, at BIDV and Vietcombank, secured assets are also much higher value than existing loans at banks.
Specifically, by the end of June, Vietcombank is lending customers more than VND 606,000 billion. In return, this bank holds secured assets worth VND 873,700 billion, 1.44 times higher. In which, 60% of collateral value comes from real estate, the rest are assets such as factories, machines and goods of mortgage companies at banks.
At BIDV, with the largest outstanding loan of commercial banking system, up to 929,200 billion dong, this bank is accepting pledged assets worth over 1.2 million billion dong (in early 2018). ), 60% of these are real estate.
According to Zing.vn, most banks currently maintain the value of collateral assets being under 60% of the total value of collateral assets. However, there are still some banks that have this rate at a very high level.
As in ACB, real estate currently accounts for 89% of the total value of collateral assets at banks. While the bank’s loan balance is currently VND 221,800 billion, the value of mortgaged real estate has reached 1.64 times (over VND 363,600 billion).
Kienlongbank also holds a handful of assets to ensure mainly real estate. Currently, this bank has a loan balance of about VND 27,300 billion, the guaranteed asset value for this loan balance is VND 48,500 billion, of which real estate accounts for 81%.
Or as in Sacombank, the bank is having a series of sale of real estate worth trillions of dong, currently also has 352,000 billion dong of real estate value, out of a total of 462,000 billion dong of collateral. Only the real estate pledged at this bank was 1.43 times higher than the total loan balance.
Asset value higher than outstanding loans is one of Sacombank’s advantages in overcoming and handling bad debts by selling assets. Most recently, the bank offered to sell a series of real estate worth over VND 20,000 billion. Since the beginning of the year, this bank has offered to sell over 30,000 billion dong of pledged properties.
Sell real estate to handle debt
In addition to Sacombank, many other banks have recently offered to sell secured assets to handle and recover bad debts such as Vietinbank, BIDV, Agribank or even VAMC … Especially, most of the properties offered for sale are value real estate lot.
At the end of the first quarter, VAMC also held a auction of Saigon One Tower with a starting price of over VND 6,000 billion. Information from VAMC also revealed that many large real estate projects are being mortgaged at the company and will take into account the possibility of public auction to handle and recover the debts attached. Among these properties are many large projects in Hanoi and Ho Chi Minh City.
Specifically, in Hanoi, many “golden land” areas are pledged at VAMC such as the entire area of the second floor, E1 apartment, Chelsea Park in Yen Hoa urban area (Cau Giay); 15-storey building on an area of 3,426 m3 in Lot CT-08C, Viet Hung New Urban Area (Long Bien). Or the whole project of Tran Thai Tong Skyview in Lot C, land lot D4 Cau Giay new urban area; All apartments have not been sold at CT 104 building, CT1 area, Usilk City project are also pledged at VAMC.
In Ho Chi Minh City, VAMC is also accepting mortgages of many land use rights and unfinished real estate projects such as the New Pearl apartment project at 192 Nam Ky Khoi Nghia (district 3); nearly 20,000 m2 of land for construction of BMC high-class apartment and villas project – Hung Long; Hung Dien commercial and residential center project (district 8); PetroVietnam Landmark project (District 2) …
In addition, many notable projects are also mortgaged in whole or in part such as Residential 584 Tan Kien, Binh Chanh (mortgage over 600 apartments); Thai Binh Plaza apartment, District 2 (mortgage of 141 apartments); 584 Lilama SHB Plaza project in Go Vap district (mortgage of 724 apartments) …
Banks raise deposit rates to attract customer deposits
Over the past 2 months, many banks have raised deposit rates to attract customer deposits. Are there any factors that have put pressure on interest rates in the past time as well as for the upcoming period?
Bank deposit channel is no longer attractive?
The first is the recent macroeconomic factors that show signs of volatility, which have a significant impact on the sentiment of depositors. The first is still the story of inflation, which is an indicator of the value of money and forecasts for the future. If inflation is too high, it means that the currency is depreciating and putting pressure on interest rates to help stabilize the monetary value. Statistics show that the consumer price index in August has continued to increase strongly by 0.45% over the previous month, accordingly, compared to the same period, it has increased to 3.98%, close to the target of 4%.
Inflation escalated again, making the bank deposit channel with interest rates at the same time become less attractive to depositors. Because with rising inflation, if the nominal interest rate stays the same, the real interest rate that customers receive will decrease. Given the prospect of oil prices going up and domestic food and food prices may fluctuate strongly during the flood and storm season, inflation in the rest of this year is under considerable pressure.
In addition, in the period of July and August, the domestic exchange rate has continuously climbed, the dong has been depreciated against the USD in the context of the monetary crisis in many economies and the dollar has risen sharply. in the international market. This makes the holding of dong more or less affected by the exchange rate, so many customers have recently moved to hold foreign currencies back.
Not only are the psychological factors affected by inflation and exchange rates, but with the stock market and securities market having a strong adjustment period from the end of the second quarter to the third quarter, many investors can Withdraw money from banks to return to these 2 investment channels, with the expectation that the market will recover soon. The fact that the stock market has recently had good recovery steps has helped many stocks rise to several tens of percent since the previous lowest level.
With the amount of deposits affected by the above factors, the liquidity of the system in general and some banks in particular have been affected, especially in addition to the State Bank’s recent withdrawal of tens of thousands. VND billion out of the system through selling foreign currency to stabilize the foreign exchange market.
The liquidity tension leads to the interbank interest rate from the previous low level, which has risen to 4-5%, making the cost of borrowing in the market 2 – 3 times higher. Therefore, some banks which depend on capital on the market 2 can actively increase interest rates in the market 1 to attract customers’ deposits with longer terms, instead of having to borrow on the market. School 2 with the same high interest rate but much shorter tenor.
Prepare for the future
Meanwhile, the liquidity pressure on the system may continue to increase when it is getting closer to the fourth quarter, when the demand for payment, production and import of goods often increases sharply to prepare for the season. peak consumption at the end of the year. Therefore, many banks can actively increase interest rates to maintain capital as well as attract new deposits, ensuring to meet liquidity needs for this period.
It is noteworthy that from the beginning of 2019, the ceiling rate of using short-term capital for medium and long term loans will continue to decrease from 45% to only 40%. It is important to know that the current medium and long-term capital source is based on the remaining term, so the medium and long-term capital of banks will tend to decrease gradually. months.
Specifically, for 12- and 13-month term deposits according to the contract, after 1-2 months the deposit amount will become short-term capital source because of the remaining term of less than 1 year, thus reducing the rate rate of using short-term capital for medium and long-term loans of the unit, because the medium and long-term loans of banks currently account for a large proportion of consumer loans, buying houses, investing in real estate projects, factories, machinery, infrastructure projects, … with a term of several years to several decades, so when calculating the remaining term, even after a few months or even a few years is still considered a loan medium and long term.
Therefore, the pressure to maintain long-term capital sources of banks is always continuous, permanent and long-term. In case it is impossible to maintain the medium and long-term capital, banks must always strengthen and boost short-term capital to ensure this ratio does not exceed the prescribed level.
And in the context of the pressure of deposit, some banks began to adjust interest rates, while other banks previously issued long-term bonds and certificates with High interest rates to strengthen long-term capital sources, causing the amount of deposits at other credit institutions to be withdrawn will inevitably lead to the following moves to increase interest rates of these banks to ensure the level of competition . And if the pressures continue to increase, then the spiral of interest rate racing will not be finished soon.