Vietnamplus

Many banks in Ho Chi Minh City are selling their mortgaged assets, mainly properties worth trillions of Vietnamese dong, to speed up the resolution of bad debts.

The Bank for Investment and Development of Vietnam (BIDV) has cleared all non-performing loans it had previously sold to the Vietnam Asset Management Company (VAMC), the bank’s Chairman Phan Duc Tu said.

Twelve out of 40 commercial banks have so far cleared all their non-performing loans (NPLs) kept at the Vietnam Asset Management Company (VAMC).

The join-stock bank Sacombank has said its last year’s pre-tax profits amounted to 3.217 trillion VND (about 139 million USD), 21.4 percent higher than its plan for the year.

It was a surprise as a number of domestic commercial banks have reported big profits after years of poor performance, but this showed the country’s business environment has improved.

The Southeast Asia Joint Stock Commercial Bank (SeABank) has completed the early redemption of all special bonds at the Vietnam Asset Management Company (VAMC), thereby helping the bank proactively monitor and handle bad debts.

The ratio of bad debts in the domestic banking system will be dropped below 3 percent by the end of 2020, making contribution to restructuring the macroeconomic policy.

Nearly 9.6 trillion VND (417.3 million USD) worth of bad debts were handled each month from August 15, 2017 to August 31, 2019, or 4.7 trillion VND higher than that during the 2012 – 2017 period.

The "Vietnam: Strengthening banking sector soundness and development" project is expected to help the State Bank of Vietnam to better anticipate and increase resilience to shocks.

The World Bank (WB) and the State Bank of Vietnam (SBV) on October 1 inked a grant agreement worth 2.2 million USD to implement a project aimed at strengthening the soundness and resilience of Vietnam’s banking sector.

Many banks are auctioning mortgaged assets, mainly real estate, worth trillions of VND to speed up the resolution of non-performing loans.

A highlight of the banks' business performance in the first six months was their impressive before-tax profit.

Though many banks have posted positive profits in the first half of 2019, their bad debts have continually increased in the wake of high credit growth in risky business segments.

The Vietnam Asset Management Company (VAMC) is planning to develop a new strategy for buying and selling bad debts in Vietnam this year, in which it will play a central role to promote the development of the debt trading market.

The Vietnam Asset Management Company (VAMC) plans to handle some 50 trillion VND (2.14 billion USD) worth of bad debts in 2019, and issue special bonds to purchase 20 trillion VND (856 million USD) of non-performing loans.

Credit institutions in Vietnam settled more than 204.4 trillion VND (8.77 billion USD) of non-performing loans (NPLs) by the end of the first quarter this year, said Nguyen Thi Hong, Deputy Governor of the State Bank of Vietnam (SBV).

The State Bank of Vietnam (SBV) is drafting a new circular regulating credit institutions’ trading and handling of non-performing loans (NPL) with the aim of forcing the institutions to focus more on bad debt settlement.

Ho Chi Minh City will create favourable conditions for Thai-based Kasikorn Bank (KB Bank) to open its branch in the city, the first of its kind in Vietnam, helping diversify local credit and banking activities, Vice Chairman of the municipal People’s Committee Tran Vinh Tuyen has said.

Some banks are putting assets secured with non-performing loans worth hundreds of billions of Vietnamese dong up for auction in the first days of the Lunar New Year to speed up the resolution of bad debts.

In 2018, bad debts of Vietnam’s banking system dropped sharply and interest rate,exchange rate and foreign currency market remained stable.