VPBank completes buying back bad debts from VAMC

VPBank has become one of the few banks to have fully resolved its outstanding bad debts at VAMC

The total value of outstanding bonds bought by VPBank from VAMC in 2019 has surpassed VND3 trillion ($130.43 million). Particularly, the bank only had to set aside more than VND1.4 trillion ($60.87 million) (about 45 per cent) to handle its outstanding bonds at VAMC.

This 45 per cent ratio is regarded as the best among the banks that have completed handling non-performing loans (NPLs) at VAMC. As a result, VPBank has become one of the few banks to finish resolving outstanding bad debts at VAMC so far.

Dealing with outstanding bonds at VAMC is one of VPBank’s most important goals in 2019, although this is expected by bank management to affect the company’s profit plan this year. This is also the reason why the bank has set forth a modest profit growth target in 2019 compared to previous years.

The plan to handle this special bond has brought VPBank’s bad debt ratio, including that at VAMC, from 5.73 per cent in the third quarter of 2018 to 2.84 per cent in the same period of 2019, helping the bank to significantly cut provision expenses.

In parallel with handling bad debts at VAMC, in 2019, VPBank showed a strong determination to restructure the bank, increasing productivity and efficiency through process improvement and technology application. Radically settling bad debts at VAMC attests to VPBank leaders’ strong commitment to improving asset quality, as well as providing a fundament for profit growth in the upcoming years.

VPBank’s latest business results showed that by the end of November 2019, the bank posted VND9.4 trillion ($408.7 million) in pre-tax profit, reaching nearly 99 per cent of the full-year plan and up 26.4 per cent on-year. Credit growth reached 15.5 per cent, much higher than the industry average.

The bank has always been the leader among private banking groups in terms of total operating income, reaching nearly VND33 trillion ($1.43 billion) as of November 30, a nearly 22 per cent jump over the same period in 2018. Above all, VPBank’s management is confident that this year the bank will exceed 10 per cent of the profit target which was set at VND9.5 trillion ($413 million) earlier this year.