Banks to speed up sales of non-performing loans
Banks to speed up sales of non-performing loans
Banks plan to speed up the sale of non-performing loans (NPLs) to the Viet Nam Asset Management Company (VAMC) to meet the central bank's deadlines, Voice of Viet Nam reported.
Eximbank will sell VND1 trillion (US$46.7 million) of NPLs to the national debt dealer, while OCB, HD Bank and Nam A Bank will sell NPLs worth roughly VND100 billion ($4.67 million) each.
In mid-March, the central bank sent an instruction to credit institutions, saying that credit institutions will have to sell at least 75 per cent of the NPLs they had registered for sale to VAMC by June 30.
The deadline for selling all NPLs is September 30.
The central bank noted that the sales of NPLs to VAMC was compulsory and that all credit institutions must meet the regulated deadlines.
General Director of Kien Long Bank Vo Van Chau said the central bank's requirement to speed up the sales of NPLs was necessary to help the banking industry bring down NPLs to below three per cent by the end of 2015, from the 4.7 per cent recorded at the end of the third quarter last year.
Despite admitting VAMC had not so far handled all NPLs it had bought from credit institutions, a deputy general director of another bank, who declined to be named, also said the handling of NPLs would face certain difficulties. So it will be hard for banks, especially those that have just acquired or merged, to reduce NPLs without selling them to VAMC.
In SCB, for example, the bank's NPLs at the end of last year was slightly more than one per cent, thanks to its NPL sale, worth VND12 trillion ($560.7 million), to VAMC.
HD Bank's NPLs are currently about 1.4 per cent, though its bad debts increased significantly after a merger with DaiA Bank in 2013.
National Advisory Council for Financial and Monetary Policy member Tran Du Lich said VAMC would have better opportunities to handle NPLs thoroughly from this year, when the economy rebounds and the regulation to open the property market to foreigners takes effect from July.
Investors would also have more choice to buy NPLs from VAMC as it had bought a significant amount of NPLs, Lich said.
VAMC plans to buy NPLs worth VND100 trillion ($4.76 billion), or 2.5 per cent of banks' total outstanding loans, this year.
Last year, VAMC bought NPLs worth about VND96 trillion ($4.57 billion), raising the total bad debts it had purchased from credit institutions to VND135 trillion ($6.43 billion), or 3.4 per cent of the total outstanding loans.
