VAMC buys $1.12 billion bad debts this year

The Viet Nam Asset Management Company bought more than VND25.53 trillion (US$1.12 billion) of non-performing loans from 14 credit institutions in the first nine months this year. - Photo VAMC

With this purchase, made from January 1 to September 30 this year, the company met the plan for the whole of 2017, as assigned by the Government.

Since its establishment in 2013 till the end of September this year, the company has bought a total of more than VND301 trillion of NPLs from 42 credit institutions at a price of VND270.92 trillion.

The company has recently begun using its right to seize mortgaged assets, given to it by the Resolution 42/2017/QH14 on piloting the bad debt settlement of credit institutions.

Sai Gon One Tower is an asset mortgaged for a bad debt worth VND7 trillion that Maritime Bank and Dong A Bank transferred to VAMC in April 2015. According to Doan Van Thang, general director of VAMC, this is the biggest debt with mortgaged assets that VAMC has ever bought.

After repossessing Sai Gon One Tower, VAMC on September 26 announced on its website that the individuals and institutions who have rights and interests related to the assets need to contact VAMC within 30 days.

After the repossession, VAMC will have the collateral evaluated and auctioned off to collect the debt.

Resolution 42 has given more power to VAMC to accelerate the process of bad debt settlement.

VAMC has also announced it is looking for price evaluation enterprises to appraise the bad debt and the mortgaged assets transferred to it by Sacombank. The mortgaged asset comprises eight land plots.

Nguyen Tien Dong, VAMC chairman, said that the company will buy debts with cash in the fourth quarter of 2017. However, the problem is that VAMC’s capital is still modest as its current charter capital is only VND2 trillion. To have money, VAMC will have to issue bonds.

VAMC is also planning to buy debts under the mode of deferred payments.

The decision has been applauded by commercial banks, which prefer cash to VAMC’s special bonds.