Citibank gains NT$27 mil. from auctioned assets

Alfred Lee, The China Post

Citibank sold 20 houses and garnered NT$27 million at an auction held last Saturday in Tainan, which helped the bank liquidate its inventory of properties acquired through overdue bank loans.

The auction, through which Citibank took back 63 percent of the NT$43 million that it had planned to recover from the public auction, created a new overdue bank loan recovery mode and served as an example for other banks eager to liquidate their inventories of properties acquired through overdue bank loans. This was the second time Citibank has held an auction to clear up its real estate inventory. It tendered its first auction on June 17 in Tainan, selling nine houses out of the 31 on its books, a hit rate of about 30 percent. The effects of the recent auction were better than previously expected. In order to improve the hit rate, Citibank commissioned a leading real estate investment consulting company to handle the auction. The real estate investment consulting company invited licensed professionals from Singapore to preside over the auction in which bidders can make a bid orally. This bidding practice attracted hundreds of bidders, including local bankers and real estate brokers to take part in the auction. Citibank said that it would sponsor more auctions to liquidate its inventory of properties throughout the island. In Tainan, Citibank has more than 70 houses acquired due to defaults of overdue bank loans. In Taiwan it has an inventory of 300 houses. In order to step up processing of such houses Citibank set up offices in eight counties to handle the auctions-related business.

The bank said it would hold further auctions in both Taipei and Kaohsiung in September. Before each auction the bank will provide information about the houses on its Web site, including details such as the sizes, locations, house styles, garage, and base prices etc. Before a house is put to an auction, the bank will make a legal clearance to assure no legal disputes will occur in the future, offer basic repairs, and allow potential customers to examine the house. Base prices of such houses are about 60 percent of their going market prices, which are based on appraisals conducted by professional real estate experts. The highest priced house in the recent auction, with a base price of NT$3.26 million and market price of NT$4.5 million, was sold for NT$3.32 million. The house in most demand, with a base price of NT$1.4 million and a market price of NT$2.3 million, was sold at NT$1.8 million after 40 biddings. The lowest priced house, with a market price of NT$900,000, was sold at NT$408,000.

Citibank said it might yet come out with more creative ways of liquidating its real estate holdings acquired due to customers’ defaults of overdue loans.