Vietnam Asset Management Company (VAMC) has bought bad debts worth only more than VND7.4 trillion (around USD332 million) from 12 credit institutions in the year to date, which is far below the full-year target.
Mr. Nguyen Quoc Hung, chairman of VAMC, told the Vietnam News Agency that the figure is much lower than this year’s target of acquiring VND40 trillion of bad debts by issuing special bonds.
However, bad debt acquisitions in the first nine months have nearly doubled the amount VAMC bought in the first half of this year. Hung told the Daily at the time that the company had acquired bad debts worth about VND4 trillion in the period.
Mr. Hung added that the firm had bought VND248 trillion of original debts and issued about VND212 trillion of special bonds since its establishment.
Commenting on the target for this year, Hung said it could be achievable though he acknowledged that it is challenging.
In the January-August period, VAMC collected and sold bad debts and mortgaged assets worth VND12 trillion compared to the target of VND30 trillion for the whole year.
Mr. Hung explained VAMC had spent much time classifying debts and mortgaged assets for sale and at the same time working out solutions to collect debts. The company is preparing to implement a plan to sell and acquire debts in line with market prices as requested by the State Bank of Vietnam.
Under the plan, VAMC will use its chartered capital of VND2 trillion to purchase debts in accordance with market prices in the initial time and from next year draw up schemes to mobilize capital including issuing bonds for debt purchases.
VAMC has received applications from banks to sell the bad debts they cannot settle, according to Hung. Many credit institutions are reviewing their debts and assessing their settlement capability.
Banks are doing their utmost to prevent debts from turning bad. Hung stressed that VAMC will provide support for credit institutions to settle bad debts to help keep the bad debt ratio of the banking system under 3% this year.