The Vietnam Asset Management Company (VAMC) sees non-performing loans(NPLs) purchase off to a good start as it has set to handle 40-70trillion VND (18.8-32.9 billion USD) of NPLs in 2013. The SaigonTimes Daily reports.
The Vietnam Asset ManagementCompany (VAMC) has seen encouraging signs of its endeavor to purchasebad debts from credit institutions, with a contract signed on October 1to buy trillions of debts and many more in the days to come, a seniorexecutive said.
Le Quoc Hung, vice chairman of VAMC,told the The Saigon Times Daily in an interview that several contractsto buy bad debts from joint-stock banks will be signed right this week.He was speaking after signing a frame contract with the Vietnam Bank forAgriculture and Rural Development (Agribank) to buy the first batch ofbad debts from the latter with the book value of over 2.4 trillion VND.
“After this deal with Agribank, both sides will sign27 sub-contracts for every specific bad debt. And this is just thefirst sign, since many more deals with other banks are being processed,”Hung told the daily.
He cited for example a framecontract to be inked with SCB covering bad debts with book valueamounting to hundreds of billions of VND, another to be signed with SHB,and one with PGBank, the last one having book value of some 200 billionVND but to be purchased at 170 billion VND.
Hung said VAMC had to screen through all the debts on offer to single out what debts to be purchased.
For example, for the frame contract signed with Agribank, VAMC lookedthrough the total amount of 3 trillion VND of bad debts, and picked outonly 1.7 trillion VND for the agreement.
Asked tocomment on the quality of bad debts, Hung said some are really bad, butthere are also many that should not be hastily sold. “I have looked atsome debts and mortgaged assets that are really valuable once the marketrecovers, so it will be regrettable if such assets are offloaded in arush,” he said.
He also noted that banks arechanging for the better their attitude toward VAMC, as more lenders areapproaching the company with numerous offers. “Initially, we had tocontact credit institutions, but now they are coming to us. They aremore open and cooperative, which can be seen as initial but encouragingresults,” he said.
VAMC has received hundreds ofdossiers from banks wanting to sell between 500 and 700 bad debts. “Ifeel assured of the target to buy back bad debts with book value of 30trillion VND within this year.”
Commenting on thecapacity to liquidate bad debts, Hung said many internationalorganizations have approached VAMC in recent times to buy debts.However, the company will not offload all such bad debts, but willretain a certain number, then restructure and improve them to rendermore support to enterprises as debtors.
He likenedbad debts to patients that need to be hospitalised, and what isimportant is to have good doctors and good treatments. “If bad debtsremain at VAMC like patients in hospital, that is no recovery at all.What should be done is to improve the debts so that they can bedischarged from hospital,” he said.
Bad debts atAgribank are the first purchased by VAMC, and the company will issuespecial bonds with the total value of over 1.7 trillion VND for thiscontract. Mortgaged assets in the contract have the total value of over3.6 trillion VND.
These debts have met conditionsrequired by the Circular No. 19/2013 on bad debt trading and handling,the source said. VAMC targets to issue 35 trillion VND worth of specialbonds to buy bad debts from now to the end of this year.-VNA
The Vietnam Asset ManagementCompany (VAMC) has seen encouraging signs of its endeavor to purchasebad debts from credit institutions, with a contract signed on October 1to buy trillions of debts and many more in the days to come, a seniorexecutive said.
Le Quoc Hung, vice chairman of VAMC,told the The Saigon Times Daily in an interview that several contractsto buy bad debts from joint-stock banks will be signed right this week.He was speaking after signing a frame contract with the Vietnam Bank forAgriculture and Rural Development (Agribank) to buy the first batch ofbad debts from the latter with the book value of over 2.4 trillion VND.
“After this deal with Agribank, both sides will sign27 sub-contracts for every specific bad debt. And this is just thefirst sign, since many more deals with other banks are being processed,”Hung told the daily.
He cited for example a framecontract to be inked with SCB covering bad debts with book valueamounting to hundreds of billions of VND, another to be signed with SHB,and one with PGBank, the last one having book value of some 200 billionVND but to be purchased at 170 billion VND.
Hung said VAMC had to screen through all the debts on offer to single out what debts to be purchased.
For example, for the frame contract signed with Agribank, VAMC lookedthrough the total amount of 3 trillion VND of bad debts, and picked outonly 1.7 trillion VND for the agreement.
Asked tocomment on the quality of bad debts, Hung said some are really bad, butthere are also many that should not be hastily sold. “I have looked atsome debts and mortgaged assets that are really valuable once the marketrecovers, so it will be regrettable if such assets are offloaded in arush,” he said.
He also noted that banks arechanging for the better their attitude toward VAMC, as more lenders areapproaching the company with numerous offers. “Initially, we had tocontact credit institutions, but now they are coming to us. They aremore open and cooperative, which can be seen as initial but encouragingresults,” he said.
VAMC has received hundreds ofdossiers from banks wanting to sell between 500 and 700 bad debts. “Ifeel assured of the target to buy back bad debts with book value of 30trillion VND within this year.”
Commenting on thecapacity to liquidate bad debts, Hung said many internationalorganizations have approached VAMC in recent times to buy debts.However, the company will not offload all such bad debts, but willretain a certain number, then restructure and improve them to rendermore support to enterprises as debtors.
He likenedbad debts to patients that need to be hospitalised, and what isimportant is to have good doctors and good treatments. “If bad debtsremain at VAMC like patients in hospital, that is no recovery at all.What should be done is to improve the debts so that they can bedischarged from hospital,” he said.
Bad debts atAgribank are the first purchased by VAMC, and the company will issuespecial bonds with the total value of over 1.7 trillion VND for thiscontract. Mortgaged assets in the contract have the total value of over3.6 trillion VND.
These debts have met conditionsrequired by the Circular No. 19/2013 on bad debt trading and handling,the source said. VAMC targets to issue 35 trillion VND worth of specialbonds to buy bad debts from now to the end of this year.-VNA
