The Vietnamese Government is striving to reduce the proportion of bad debts to approximately 3 percent, according to the government report on socio-economic development 2014/2015, which was presented at the ongoing eighth session of the 13th National Assembly.

The report shows that the measures to restructure credit institutions were implemented effectively and achieved practical results. Commercial banks that performed badly were reformed and seven credit institutions stopped operating completely. Additionally, the financial capacity of commercial banks increased and system safety was ensured.

By the end of September, 53.6 percent of the total bad debt had been addressed. From January-September, the Vietnam Assets Management Company (VAMC) purchased more than 50 trillion VND worth of bad debt. Until August, credit institutions reserved a total of 78.5 trillion VND for dealing with bad debts.

The value of mortgage assets is now twice as high as for loans. The system’s capital adequacy ratio stood at 12.42 percent in August.

In addition, capital inflows are moving more stably, with less dependence on the inter-bank system. The share of capital mobilised on the inter-bank market vis-a-vis the total mobilised capital decreased from 17.9 percent in December 2012 to 15.6 percent in December 2013, and 13.73 percent in September 2014.

In 2015, the Government will continue to restructure credit orginisations, improve its financial and administrative capacities, and enhance the quality of credit in order to reduce risks and ensure safety for the system.

It will also undertake maximum efforts to complete the credit institution restructuring project, handle bad debts, and develop the debt trading market.

At the same time, the Government will devise appropriate mechanisms to improve the function and operational efficiency of the VAMC.-VNA