VAMC assigned to deal with US$6.1-billion bad debts in 2018

By Minh An - Jan 23, 2018 | 10:00 AM GMT+7

TheLEADERThe amount of bad debt that the Vietnam Asset Management Company (VAMC) has to deal with this year accounts for nearly half of the total bad debts VAMC has bought from banks.

According to the State Bank of Vietnam Portal, VAMC has to date bought VND307,932 billion (US$13.58 billion) of bad debts on the balance sheet with the purchase price of VND277,755 billion (US$12.25 billion). 

These are 26,221 debts purchased from 16,269 customers at 42 credit institutions from their establishment date until December 31, 2017.

In addition, VAMC has signed contracts with five credit institutions to buy debts worth VND3,142 billion (US$124 million) from six customers at the market price.

Previously, in September 2017, Sacombank announced the sale of three debts valued VND2.5 trillion (US$110 million) at the market price to VAMC.

In 2017, VAMC cooperated with banks to recover VND30.7 trillion (US$1.35 billion), up VND2.7 trillion (US$119 million) compared to 2016.

The National Financial Supervision Commission of Vietnam (NFSC)’s recent report showed that credit institutions have limited the transfer of debts to VAMC and actively dealt with bad debts by selling debts, collaterals, using provisions and so on.

"In 2017, the credit institutions handled about VND70 trillion (US$3.08 billion) of bad debts, a 40 percent increase over 2016," the report stated.

NFSC added that since fourth quarter, the new regulations and Resolution No. 42/2017/QH14 on the handling of bad debts have basically solved the legal problems related to the handling of bad debts and collaterals.

In 2018, VMAC has been assigned to settle at least VND140 trillion (US$6.1 billion) of bad debt, five times higher than the amount handled in 2017.

Besides, the company is also assigned to buy minimum VND6.6 trillion (US$291 million) of bad debts at the market price through the solutions approved in the scheme on restructuring and enhancing the operational capacity of VAMC in the 2017-2020 period with vision towards 2022.