The Hanoitimes - The central bank-run Vietnam Asset Management Company (VAMC) plays a vital role in solving bad debts in the banking system, according to the State Bank of Vietnam`s representative.
VAMC has resolved VND310.5 trillion (US$13.4 billion) in bad debts from its establishment in mid-2013 to June 30, 2018, accounting for 40% of total bad debts solved in the banking system in the same period, the State Bank of Vietnam (SBV) said on its website.
VAMC's operations have contributed to bringing down the bad debt ratio to 2.18% of total outstanding loans from the previous rate of 3.61% in 2013, below the 3% target set by the National Assembly.
In the five year period, VAMC in collaboration with credit institutions recouped VND100 trillion (US$4.31 billion).
Thanks to the introduction of Resolution 42 in August 2017, VAMC has reclaimed VND30.8 trillion (US$1.32 billion) in bad debts alone, up nearly VND2 trillion (US$87.9 million) year-on-year and 40% above the initial target.
The toxic loans recouped by VAMC in 2017 are equivalent to over two thirds the total value recouped by VAMC in the previous four years.
The resolution, which came into effect last August, provides special pilot treatment of bad debts at credit institutions.
In 2017, VAMC purchased bad debts worth VND3.1 trillion (US$133.86 million) in cash at market value, of which the company later recouped VND2.9 trillion (US$125.2 million) or equivalent to 90% of the paid amount.
Deputy Governor of the SBV Nguyen Kim Anh considered VAMC as the state's special instrument in solving bad debts, creating stability for the banking system over the last five years.
In 2018, VAMC set target of purchasing bad debts worth VND27 trillion - VND32 trillion (US$1.1 billion - US$1.4 billion) with special bonds and VND3.5 trillion (US$153 million) with cash at market value, while handling bad debts worth VND24.9 trillion (US$1.1 billion).