The Vietnam Asset Management Company (VAMC) bad debts exchange platform will be approved by the central bank at the beginning of 2021.
Doan Van Thang, general director of VAMC said that in 2020, the firm bought a total of 281 bad debts by special bonds, with a total value of around VND15.218 trillion ($661.65 million), nearly completing the initial target assigned by the State Bank of Vietnam (SBV).
|VAMC will soon put its bad debts exchange platform in operation |
VAMC also handled and cooperated with credit institutions to handle the collection of non-performing loans (NPLs) with VND47.515 trillion ($2 billion) of principal balance (temporarily calculated), reaching 95.03 per cent of its plan for 2020.
As of December 31, 2020, VAMC bought bad debts with special bonds of around VND374.622 trillion ($16.3 billion). Moreover, the company’s debt recovery activities reached VND167.019 trillion ($7.26 billion). VAMC's debt collection results accounted for 63 per cent of its total accumulated debt collection.
Furthermore, VAMC also coordinates with local authorities to assist customers in purchasing and completing relevant legal procedures to speed up debt collection. At the same time, VAMC also implements proper provisioning for better risk management.
Thang also revealed that the NPL exchange platform will soon be approved by the SBV soon in 2021. However, it will not be until early 2022 for the platform to be officially established.
Previously, the SBV issued the VAMC Development Strategy for 2021-2025 with a vision to 2030. The strategy clearly states that one of the major tasks for VAMC is to complete the establishment and put into operation the debt exchanging platform.
Nguyen Kim Anh, Deputy Governor of the SBV, suggested VAMC to continue to settle NPLs, according to the National Assembly’s Resolution No.42/2017/QH14 on the pilot settlement of bad debts of credit institutions dated June 21, 2017.
The Deputy Governor also requested VAMC to make great efforts to implement debt settlement and recovery plans, speed up the progress of handling bad debts, strengthen NPL trading activities as per the market mechanism, and soon put VAMC Debt Exchange into operation.
At the same time, VAMC needs to coordinate effectively with credit institutions in dealing with bad debts, actively implementing measures to control and limit arising bad debts in order to bring the NPL ratio on the balance sheet to a safe ratio (below 3 per cent), according to the SBV’s Directive on organising the implementation of key tasks of banking sector in 2021.