Customers at HDBank's head office in HCM City. (Source: VNA)

Hanoi (VNA) – Commercial banks offloaded a large volume of non-performing loans (NPLs) to the Vietnam Asset Management Company (VAMC) in 2015 to reduce the bad debt rate to below 3 percent.

This was the rate required by the central bank.

Online business website Bizlive.vn quoted recent financial reports from banks as saying that by the end of 2015, BIDV topped the list of banks those sold bad debts to the national debt trading company with a sale of roughly 22 trillion VND (977 million USD), equal to 3.7 percent of the bank’s total outstanding loans in the year.

Besides selling bad debts, BIDV also boosted lending last year, making its credit touch 34.21 percent by the end of last year. It helped the bank’s NPLs reduce from 2.03 percent in 2014 to 1.62 percent by December 31, 2015.

Vietcombank also handled more than 2.6 trillion VND of NPLs last year, 1.989 trillion VND of which were sold to VAMC. The bad debt rate at the bank stood at 2 percent by the end of last year.

With a sale of 6.291 trillion VND of bad debts to VAMC and a credit growth of 22.3 percent last year, Vietinbank’s bad debt was reported at 0.91 percent.

MB’s non-performing loans also reduced to 1.32 percent from 2.18 percent in 2014 after the bank sold roughly 1.1 trillion VND of NPLs to VAMC.

In the year, Eximbank and VIB sold more than 1.4 trillion VND of the debts each while the number of VP Bank and Techcombank was 564 billion VND and 761 billion VND, respectively.

According to the current regulations, though they have sold the bad debts to VAMC, banks are still required to establish yearly provisional funds amounting to 20 percent of the value of the sold debts. Experts, therefore, suggested to lenders that they boost provisions for bad debts, as well as handle and take initiative to collect their debts by themselves, apart from selling to VAMC.

National Financial and Monetary Policy Advisory Council member Tran Du Lich said that selling bad debts to the VAMC was a good way for banks to clean up their account balance, but the requirement for provisions would create significant pressure on them.-VNA