Illustrative image (Source: internet) Hanoi (VNS/VNA) - The Vietnam Asset ManagementCompany (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 buynon-performing loans of credit institutions and spend 5 trillion VND in cash to buy another 5trillion VND ofNPLs at market prices.
According to Doan VanThang, VAMC’s General Director, VAMC was alsopromoting the foundation of a debt trading platform together with an AMC clubto exchange experience and information so as to establish a centralised marketfor trading bad debts.
This year, VAMC also expected to get the Government'sapproval to double its charter capital to 10 trillion VND to improve its financialcapacity.
Under the project of restructuring the system of creditinstitutions in association with handling bad debts in the 2016-2020 period approved by thePrime Minister on July 19, 2017, VAMC planned to raise its charter capital to 10trillion VND.However, in November 2017, the Prime Minister only allowed VAMC to increase itscharter capital to 5 trillion VND.
According to VAMC’s recent report, the company reclaimed baddebts worth around 69.78 trillion VND in 2019 compared to the sum of 30.9trillion VND in2018.
Last year, VAMC bought 381 bad debts of nine credit institutionsworth 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 andhelped 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 8.2trillion VND to buybad debts worth 8 trillion VND atmarket prices.
The central bank predicted that bad debts would increase thisyear due to the impacts of the COVID-19 pandemic, given that 23 percent of thetotal outstanding loans, or 2 quadrillion VND, were in sectors suffering from thepandemic. In the best scenario, the ratio of bad debts would be at around 2.6-3percent by the year end./.
VNA
