VAMC helps bring ratio of non-performing loans to under 3 percent

The ratio of the non-performing loans (NPLs) at commercial banks fell from 3.61 percent at the end of 2013 to 2.18 percent at present, according to Chairman of the Vietnam Asset Management Company (VAMC) Nguyen Tien Dong.

Monday, July 30, 2018 11:01

VAMC helps bring ratio of non-performing loans to under 3 percent ảnh 1

The VAMC handled 310.52 trillion VND (13.35 billion USD) of bad debts as of June 30. (Photo: vneconomy.vn)

Hanoi (VNA) – The ratio of the non-performing loans (NPLs) atcommercial banks fell from 3.61 percent at the end of 2013 to 2.18 percent atpresent, according to Chairman of the Vietnam Asset Management Company (VAMC)Nguyen Tien Dong.

The VAMC handled 310.52 trillion VND (13.35 billion USD) of bad debts as ofJune 30, or over 40 percent of the total processed NPLs. The company alsojoined hands with credit institutions to recoup nearly 100 trillion VND (4.3billion USD).

In 2017 alone, the company recovered 30.85 trillion VND (1.33 billion USD), completing140 percent of the assigned plan thanks to the National Assembly’s DecreeNo.42/2017/QH14 on piloting bad debt settlement at credit institutions. Theamount was equal to nearly two thirds of the total recouped debt during2013-2016.

Besides buying debts from credit institutions by issuing special bonds, theVAMC bought more than 3.1 trillion VND (133.3 million USD) in market mechanism.

Deputy Governor of the State Bank of Vietnam (SBV) Nguyen Kim Anh said thatafter five years of operation, VAMC completed its assigned task in tacklingNPLs in financial organisations, contributing to bringing the banking sector’s baddebt ratio to under 3 percent.

The company has been effectively implementing the project on restructuringcredit institutions in coupled with bad debt settlement during 2016-2020, shenoted.

Dong said that his company will gradually reduce the issuance of special bondsto purchase bad debts, and move to buy the debts in accordance with marketmechanism.

VAMC is building a bad debt data system, which will help form a NPLs market inthe future, while serving as a measure to involve both domestic and foreigninvestors in dealing with bad debts, he added.

The VAMC’s chartered capital is currently standing at 2 trillion VND (86million USD), which is still inadequate to step up NPLs purchase in marketmechanism. Thus, the firm is asking the SVB to increase its chartered capitalto 5 trillion VND (215 million USD) by the end of this year and 10 trillion VND(430 million USD) as of the end of 2020 so that it has sufficient financialresource to tackle bad debts in an effective and prompt manner.-VNA

VNA

#non-performing loans (NPLs) #ratio #2.18 percent #Vietnam Asset Management Company (VAMC) #credit institutions #issuing special bonds #Vietnam News Agency #Vietnamplus

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