Illustrative image (Source: internet) Hanoi (VNS/VNA) - The Vietnam Asset Management Company (VAMC) targeted to settle bad debts worth totally 50 trillion VND (2.15 billion USD) this year.
It also planned to issue 15 trillion VND worth of special bonds to buy non-performing loans of credit institutions and spend 5 trillion VND in cash to buy another 5 trillion VND of NPLs at market prices.
According to Doan Van Thang, VAMC’s General Director, VAMC was also promoting the foundation of a debt trading platform together with an AMC club to exchange experience and information so as to establish a centralised market for trading bad debts.
This year, VAMC also expected to get the Government's approval to double its charter capital to 10 trillion VND to improve its financial capacity.
Under the project of restructuring the system of credit institutions in association with handling bad debts in the 2016-2020 period approved by the Prime Minister on July 19, 2017, VAMC planned to raise its charter capital to 10 trillion VND. However, in November 2017, the Prime Minister only allowed VAMC to increase its charter capital to 5 trillion VND.
According to VAMC’s recent report, the company reclaimed bad debts worth around 69.78 trillion VND in 2019 compared to the sum of 30.9 trillion VND in 2018.
Last year, VAMC bought 381 bad debts of nine credit institutions worth more than 20.5 trillion VND by special bonds at the price of nearly 19.8 trillion VND.
The company also bought 37 bad debts at market prices and helped credit institutions handle more than 2.13 trillion VND of bad debts.
Since its foundation in 2013 to the end of December 2019, VAMC used special bonds to buy bad debts worth 359.39 trillion VND at the price of 327.4 trillion VND. In addition, it spent 8.2 trillion VND to buy bad debts worth 8 trillion VND at market prices.
The central bank predicted that bad debts would increase this year due to the impacts of the COVID-19 pandemic, given that 23 percent of the total outstanding loans, or 2 quadrillion VND, were in sectors suffering from the pandemic. In the best scenario, the ratio of bad debts would be at around 2.6-3 percent by the year end./.
VNA
