Around 10 credit institutions are queuing up to sell their non-performing loans to the Vietnam Asset Management Company (VAMC), in an attempt to shore up their balance sheets

VAMC's Vice Chairman, Nguyen Quoc Hung, told local press that banks below the required 3 per cent level were also keen to rid themselves of bad loans.

A full applicant list is yet to be released, meanwhile VAMC will prioritise buying back loans from banks running a bad debt ratio of above 3 per cent.

Nguyen Van Le, general director of SHB, which plans to sell about 1 trillion VND (47.3 million USD) of bad debt to the VAMC, told Tuoi Tre that selling the loans would help lower the bank's bad debt ratio, consolidate balance sheets and allow special bonds to trade on the Open Market Operation (OMO).

OCB's Chairman, Trinh Van Tuan, told Tuoi Tre that VAMC's buying programme was the best way to resolve non-real estate secured loans, which accounted for a big share in the bank's bad debt structure.

The sale would help the bank to put capital in circulation for business operations, Tuan said.

Late last week, VAMC purchased VND170 billion ($8.04 million) of bad debts from PGBank, with the deal helping to lower the bank's bad debt ratio from 8 per cent, to around 3 per cent by the year's end.

The long list of applications to sell loans fast accumulated after VAMC's purchase of 11 bad debts for 1.7 trillion VND (80.6 million USD) from Agribank using its bonds-scheme early last week. The deal wiped 7.56 per cent of the bank's bad debt, leaving Agribank's bad debts worth around 33.52 trillion VND (1.58 billion USD).

The central bank is currently deciding how much the Ha Noi-based bank will get, but early predictions show the bank will not receive more than 70 per cent of the bond's value.

VAMC has also been verifying procedures necessary to buy debts from commercial banks. As planned, the company will issue bonds as much as 30 trillion VND (1.4 billion USD) to buy debt from now until the end of this year.

The State company, which is monitored by the State Bank of Viet Nam, is hoping the actions will encourage foreign investors to buy the assets, estimated to have substantial market value.-VNA