Banks estimate large extraordinary revenues from debt recovery

Some banks, including MSB, Sacombank, VIB and Saigonbank, are expecting extraordinary revenues worth up to trillions of Vietnamese dong from debt recovery this year.

In a recent report, Vietcombank Securities Company (VCBS) said Vietnam Maritime Commercial Joint Stock Bank (MSB) this year will record extraordinary income growth from bad debt recovery and capital pestment of its financial company TNEX Finance.

MSB is currently in the process of completing the handling of debt restructuring and guarantees with its large borrowers Vinashin and Vinalines. The bank said it will also promote activities to clear bad debts out of the balance sheet by using the reserve fund to bring the bad debt ratio below 3%.

According to VCBS, in the second quarter of this year, MSB collected two extraordinary revenues worth more than 800 billion VND from the debt recovery. The bank expects this year's extraordinary income from debt recovery will reach about 1.7 trillion VND.

MSB is also implementing a plan to sell TNEX Finance. Currently, the bank is working with the consulting firm McKinsey to build a strategy for developing a new digital credit model within the next 6-12 months. Three investors from the Republic of Korea, Japan and Taiwan (China) are interested in this financial company whose value is estimated at some 1.8-2 trillion VND.

On the sidelines of the 2024 Annual General Meeting of Shareholders, MSB General Director Nguyen Hoang Linh said MSB may record two extraordinary revenues from debt settlement in the second quarter this year.

As for the TNEX Finance, MSB still leaves an open plan in cases where investors want to cooperate, Linh said, adding that three investors from South Korea, Japan and Taiwan (China) are cooperating with the finance company.

As for Sacombank, at the bank’s 2024 AGM, its leaders said they successfully auctioned the debt secured by property rights at the Phong Phu Industrial Park project. At that time, Sacombank successfully recovered 20% of the total auction value. It is due 40% of the total value will be paid in 2024 and the remaining 40% will be paid in 2025.

In a newly published report, KB Securities Company (KBSV) expects Sacombank will record an extraordinary income of 1.336 trillion VND in 2024 from the sale of debt related to the Phong Phu Industrial Park.

Regarding VIB, the bank in the first quarter this year posted an extraordinary profit of more than 226 billion VND from other business activities, five times higher than the same period in 2023. At the bank’s recent AGM, VIB Chairman of the Board of Directors Dang Khac Vy said this bank recovered 200 billion VND from risk handling in the first quarter of 2024.

With the warming of the real estate market and additional debt recovery solutions, the bank also expects an extraordinary income of 1-1.5 trillion VND from debt recovery this year.

Continuing the impressive performance in 2023, Saigonbank's net profit from other activities in the first quarter of 2024 also reached 28 billion VND, an increase of 2.15 times over the same period last year. According to Saigonbank's board of directors, in 2024, the bank will implement solutions to recover bad debts to increase income./.