Bad debts fall to 3.21 per cent
Bad debts fall to 3.21 per cent
The ratio of bad debts in the domestic banking system dropped to 3.21 per cent at the end of August 2015, from 4.93 per cent recorded in September 2012.
State Bank of Viet Nam Deputy Governor Nguyen Kim Anh announced the figures at a seminar reviewing banking reorganisation over the last three years, in Ha Noi today.
Anh reported that, as of August 2015, credit institutions had settled non-performing loans worth VND424.14 trillion (US$18.85 billion), equivalent to some 91 per cent of the total soured loans unveiled in September 2012.
She said the Viet Nam Asset Management Company, or VAMC, had helped handle more than 41 per cent of the total bad debts, while the remainder had been solved by credit institutions themselves with provisional funds or through the sale of mortgages.
She added that the achieved results in debt treatment had significantly supported the banking restructuring process, cleaning up lenders' finance and fostering credit expansion in the economy.
The results also reflected significant efforts of lenders without support from the State budget, while economic conditions remained tough.
VAMC Chairman Nguyen Quoc Hung said the company bought about VND91.31 trillion ($4.06 billion) in bad debt, at a price of some VND82.16 trillion ($3.65 billion), during the first nine months of this year.
He said this was "quite good progress" as the purchased amount had already exceeded the VND80 trillion ($3.56 billion) quota the firm had set for 2015.
In nine months, the VAMC recovered debts totalling VND9.83 trillion ($436.89 million), more than twice as that in 2014, thanks to the economic rally and a warming-up realty market.
Anh said that with the ongoing debt treatment progress, the overall bad debt ratio is likely to fall to below three per cent this year, in line with the national target for 2015.
Late last month, Hung revealed in an interview with Bloomberg that the VAMC will sign a co-operation agreement with the finance ministry's Debt and Asset Trading Corporation by the end of 2015 to "lay the foundations for a debt market".
The firms will jointly propose needed regulatory changes to the government to quicken the bad debt resolution process at banks and companies, he said.
